Pinnacle West Capital (PNW): Evaluating Valuation with Mixed Analyst Ratings, Insider Selling, and Arizona Growth Potential

Interest in Pinnacle West Capital (PNW) has picked up lately as investors weigh mixed analyst opinions and a rise in insider selling. This comes alongside optimism surrounding Arizona’s infrastructure growth and regulatory support ahead of the next earnings release.

See our latest analysis for Pinnacle West Capital.

Pinnacle West Capital’s share price has climbed 5.5% over the past month and 9.6% year-to-date, reflecting strong momentum as infrastructure investments and sector tailwinds fuel investor confidence. In the bigger picture, the stock’s 12% one-year total shareholder return and impressive three-year gain of nearly 71% highlight a solid track record of delivering for long-term investors. However, recent insider selling and mixed analyst sentiment inject some caution into the story.

If you’re interested in what other companies are seeing rising investor interest and strong momentum lately, now’s a great time to discover fast growing stocks with high insider ownership

With shares trading just below analyst price targets and sector momentum running high, the central question is whether Pinnacle West Capital remains undervalued or if the market has already priced in its future growth. This raises the issue of whether there is a true buying opportunity or not.

Most Popular Narrative: 2.6% Undervalued

With Pinnacle West Capital's fair value pegged at $94.92 by the most followed narrative and a last close of $92.41, the stock sits a touch below what analysts anticipate. This invites attention to the driving forces behind this target.

“Pinnacle West's accelerated infrastructure investments in transmission, distribution, and generation (including the new regional natural gas pipeline and major grid projects) are expected to significantly expand the regulated rate base, supporting higher allowed returns and future revenue growth. The ongoing influx of large commercial and industrial customers (notably data centers and manufacturers), along with a backlog of nearly 20 GW in uncommitted customer interconnection requests, signals substantial upside potential for volumetric sales and rate base expansion, positively impacting revenue and long-term earnings.”

Read the complete narrative.

Want to know what’s fueling this premium? The narrative leans heavily on aggressive infrastructure bets and a customer surge to achieve its price target. The detail that really stands out is how these bold assumptions could drive profits and earnings multiples higher than market averages. Unlock the full projection to see exactly what’s behind that fair value call.

Result: Fair Value of $94.92 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if regulatory lag or a slower than expected shift to renewables persists, these factors could challenge the optimism driving current valuations.

Find out about the key risks to this Pinnacle West Capital narrative.

Another View: Industry Multiples Tell a Cautious Story

While analyst forecasts see Pinnacle West as slightly undervalued, our look at its price-to-earnings ratio reveals a different angle. Trading at 19.2x earnings, the stock is cheaper than both US Electric Utilities peers (21.1x) and the calculated fair ratio of 20.4x. Still, how long can this relative bargain last as sector dynamics evolve?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Pinnacle West Capital for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Pinnacle West Capital Narrative

Don’t forget, if you’re seeing different storylines in the data or want to shape a thesis of your own, you can craft your own narrative in just a few minutes: Do it your way

A great starting point for your Pinnacle West Capital research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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