Update shared on 22 Nov 2025
Fair value Decreased 0.15%Pinnacle West Capital's analyst price target has modestly declined, dropping from $96.07 to $95.93 per share. Analysts cite ongoing uncertainties around regulatory improvements in Arizona and tempered expectations for near-term earnings growth, even though there are positive long-term structural trends.
Analyst Commentary
Recent analyst reports on Pinnacle West Capital reflect a mix of optimism regarding long-term trends and caution tied to regulatory and earnings outlooks. The following are key takeaways grouped by prevailing analyst sentiment.
Bullish Takeaways- Bullish analysts highlight the positive effects of sustained load growth, which continues to support earnings and justify future capital expenditures.
- Structural improvements in Arizona's regulatory environment, particularly following the upcoming 2025 general rate case, are seen as catalysts for reducing regulatory lag and supporting the company's long-term growth thesis.
- Arizona's economic expansion, industrial demand, and favorable demographic trends are viewed as foundational drivers positioning Pinnacle West for above-average growth compared to peers.
- Pinnacle West's maintained 2025 outlook and exposure to low climate risk conditions further differentiate the company in the segment. This enhances its potential to outperform in the years ahead.
- Bearish analysts point to lingering uncertainty around the pace and impact of regulatory improvements in Arizona, with some benefits unlikely to be realized before 2028.
- There is tempered enthusiasm for near-term earnings acceleration due to ongoing regulatory unknowns and utility sector underperformance relative to broader indices in recent months.
- Valuation adjustments reflect cautiousness, with several analysts lowering price targets as current trading levels are not considered to fully reflect the company’s fundamental prospects.
- The company's current rating consensus often lands at Hold or Neutral, indicating a belief that material upside may be limited until regulatory clarity and earnings momentum improve.
What's in the News
- Pinnacle West Capital raised its 2025 consolidated earnings guidance to a new range of $4.90 to $5.10 per diluted share, up from $4.40 to $4.60. This change is due to positive customer and sales growth and the impact of favorable weather, partially offset by increased operations and maintenance expenses (Key Developments).
- The company issued new guidance for 2026, projecting consolidated earnings in the range of $4.55 to $4.75 per diluted share on a weather-normalized basis, with sales growth expectations of 4% to 6% (Key Developments).
- Pinnacle West Capital's board approved a 1.7% increase in the annual dividend, raising it by 6 cents to $3.64 per common share. The quarterly dividend will be $0.91, payable on December 1, 2025 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has edged down slightly from $96.07 to $95.93 per share.
- Discount Rate has increased modestly from 6.78% to 6.96%.
- Revenue Growth expectation remains essentially unchanged, holding near 4.53%.
- Net Profit Margin has risen marginally, moving from 12.83% to 12.84%.
- Future P/E has decreased notably from 20.90x to 18.26x. This indicates lower valuation expectations for future earnings.
Disclaimer
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