Earnings Update: Pinnacle West Capital Corporation (NYSE:PNW) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts

Pinnacle West Capital Corporation (NYSE:PNW) just released its yearly report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.5% to hit US$4.7b. Statutory earnings per share (EPS) came in at US$4.41, some 3.0% above whatthe analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Pinnacle West Capital

Following the latest results, Pinnacle West Capital's seven analysts are now forecasting revenues of US$4.90b in 2024. This would be an okay 4.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 7.9% to US$4.77. Before this earnings report, the analysts had been forecasting revenues of US$4.79b and earnings per share (EPS) of US$4.77 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the slight bump in revenue estimates.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$76.45, implying that the uplift in revenue is not expected to greatly contribute to Pinnacle West Capital's valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Pinnacle West Capital at US$95.00 per share, while the most bearish prices it at US$68.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Pinnacle West Capital's revenue growth is expected to slow, with the forecast 4.4% annualised growth rate until the end of 2024 being well below the historical 6.0% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.4% annually. Even after the forecast slowdown in growth, it seems obvious that Pinnacle West Capital is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$76.45, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Pinnacle West Capital going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Pinnacle West Capital (1 is potentially serious!) that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.