Phoenix, Arizona-based Pinnacle West Capital Corporation (PNW) provides retail and wholesale electric services primarily in Arizona. With a market cap of $9.7 billion, Pinnacle West Capital engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities.
Companies worth $2 billion or more are generally described as "mid-cap stocks," Pinnacle West Capital fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the electric utilities industry.
The stock touched its three-year high of $95.42 on Nov. 27 and is currently trading 11% below that peak. PNW stock has dipped nearly 3.8% over the past three months, outperforming the Utilities Select Sector SPDR Fund’s (XLU) 5.4% decline during the same time frame.
Over the longer term, Pinnacle’s performance has remained robust. PNW gained 11.9% over the past six months, outpacing XLU’s 10.4% gains during the same time frame. Meanwhile, PNW surged nearly 20% over the past 52 weeks, marginally lagging behind XLU’s 20.8% returns over the past year.
To confirm the bullish trend and recent downturn, PNW has traded consistently above its 200-day moving average since early May and mostly above its 50-day moving average since early March with some fluctuations before dropping below the 50-day moving average in mid-December.
Pinnacle West Capital stock prices surged over 3.9% following the release of its better-than-expected Q3 results on Nov. 6. The exceptionally hot summer of 2024 led to increased energy consumption as customers cooled their homes and workplaces, driving an 8% year-over-year growth in operating revenues to $1.8 billion, which exceeded analysts’ estimates by a notable 5.2%.
However, Pinnacle’s operations and maintenance expenses increased 23.2% compared to the year-ago quarter to $308.1 million. This increase impacted operating margins and coupled with other rising expenses, caused a slight decline in net income to shareholders, which fell to approximately $395 million. Despite these challenges, Pinnacle West Capital's EPS of $3.37 surpassed analysts’ expectations.
Additionally, Pinnacle West Capital has outperformed NextEra Energy, Inc. (NEE), the market leader in electric utilities, which saw a 2.2% decline over the past six months and gained 19% over the past year.
Among the 15 analysts covering the PNW stock, the consensus rating is a “Moderate Buy.” Its mean price target of $94 represents a 10.7% premium to current price levels.
