With a market cap of $10.3 billion, Pinnacle West Capital Corporation (PNW) provides retail and wholesale electricity services in Arizona through its subsidiary, Arizona Public Service Company (APS). The company generates, transmits, and distributes electricity from coal, nuclear, gas, oil, and solar energy sources.
Shares of the power company have outperformed the broader market over the past 52 weeks. Pinnacle West Capital stock has returned 33.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.8%. Moreover, shares of PNW are up 6.6% on a YTD basis, compared to SPX's 4.5% gain.
Looking closer, the Phoenix, Arizona-based company has slightly outpaced the Utilities Select Sector SPDR Fund's (XLU) 31.1% return over the past 52 weeks and a 6% YTD gain.
Shares of Pinnacle West rose 3.9% on Nov. 6 after the company reported stronger-than-expected Q3 2024 EPS of $3.37, beating the consensus estimate. Revenue also surpassed expectations, reaching $1.8 billion, a 7.9% increase from the prior year. Investors responded positively to the company raising its 2024 EPS guidance to $5 - $5.20, higher than both its previous forecast and the consensus estimate. Additionally, Pinnacle West’s plan to invest $9.7 billion from 2024 to 2027 further boosted investor confidence.
For fiscal 2024, which ended in December, analysts expect PNW's EPS to grow 16.3% year-over-year to $5.13. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 15 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings and eight “Holds.”
This configuration is slightly more bullish than three months ago, with six “Strong Buy” ratings on the stock.
On Dec. 5, 2024, Citi analyst Ryan Levine maintained a “Neutral" rating on Pinnacle West while raising the price target to $95. The Arizona Corporation Commission's approval of a policy statement for formula rates improves the company's outlook by reducing risks around its next rate case filing by mid-2025.
As of writing, PNW is trading below the mean price target of $94.07. The Street-high price target of $104 implies a potential upside of 15%.
