Phoenix, Arizona-based Pinnacle West Capital Corporation (PNW) provides retail and wholesale electric services primarily in the state of Arizona. With a market cap of $9.3 billion, Pinnacle West Capital engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities. It is expected to announce its Q2 earnings before the market opens on Thursday, August 1.
Ahead of the event, analysts anticipate Pinnacle West to report a profit of $1.17 per share, up 24.5% from $0.94 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates in three of the past four quarters while missing on one other occasion. Its EPS for the last reported quarter amounted to $0.15, bouncing back from a loss of $0.03 per share in the previous year quarter and surging past the Street's estimates by a whopping 850%.
Looking ahead to fiscal 2024, analysts expect Pinnacle West to report an EPS of $4.76, up 7.9% from $4.41 in fiscal 2023. In fiscal 2025, its EPS is projected to grow 5.5% annually to $5.02.
PNW stock is up 14.24% on a YTD basis, underperforming the S&P 500 Index’s ($SPX) 16.2% gains but edging past the S&P 500 Utilities Sector SPDR’s (XLU) 10.6% returns over the same time frame.
Pinnacle West’s stock stayed in the green after its Q1 earnings results was announced on May 2, with a notable jump in profits. The company reported a solid net income of $16.9 million, a dramatic turnaround from last year's $3.3 million loss, thanks to a $23 million gain from selling Bright Canyon Energy. Consistent dividend payouts also underscored its commitment to shareholders, keeping the momentum strong.
However, Pinnacle West has faced a slew of challenges this year. As Arizona's temperatures soar, the company was scrambling to boost its summer readiness and beef up its fire mitigation strategies. From struggling with infrastructure maintenance to navigating new wildfire protocols, it's a balancing act. Meanwhile, regulatory hurdles like a rehearing on rate cases and higher operating costs have added to the pressure.
The consensus opinion on Pinnacle West stock is moderately bullish, with a “Moderate Buy” rating overall. Out of the 12 analysts covering the stock five recommend a “Strong Buy” and the remaining seven analysts are playing it safe with a “Hold” rating.
Although Pinnacle West is trading currently above its average target price of $77.86, the Street-high target of $82.07 indicates a potential upside of 2.4% from current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
