The Bull Case For Pinnacle West Capital (PNW) Could Change Following KeyBanc Downgrade After Routine Dividend

• Pinnacle West Capital’s board recently declared a routine quarterly dividend of US$0.91 per share, payable on March 2, 2026, to shareholders of record on February 2, 2026.
• Shortly after this dividend decision, KeyBanc’s downgrade of the stock highlighted shifting analyst sentiment around the company’s future risk-reward balance.
• We’ll now explore how KeyBanc’s downgrade, against a backdrop of robust Arizona demand expectations, could influence Pinnacle West’s investment narrative.

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Pinnacle West Capital Investment Narrative Recap

To own Pinnacle West Capital, you need to believe that Arizona’s strong population and economic trends will translate into steady, regulated earnings, even as the utility manages high capital needs and weather related pressures. KeyBanc’s downgrade draws attention to that balance of growth and risk, but it does not materially change the near term focus on regulatory timing and cost recovery as the key catalyst and main constraint.

The recent affirmation of a US$0.91 per share quarterly dividend, payable in March 2026, is the most relevant data point alongside the downgrade, because it underlines management’s current confidence in cash generation while investors debate future risk and reward. For many shareholders, that dividend consistency sits alongside Arizona’s demand outlook and ongoing grid investment plans as they weigh how much regulatory lag and extreme weather risk they are comfortable taking on.

Yet while the growth story sounds straightforward, the risk of significant future stranded fossil fuel assets is something investors should be aware of as...

Read the full narrative on Pinnacle West Capital (it's free!)

Pinnacle West Capital's narrative projects $6.1 billion revenue and $791.6 million earnings by 2028. This requires 5.1% yearly revenue growth and about a $215 million earnings increase from $576.1 million today.

Uncover how Pinnacle West Capital's forecasts yield a $96.07 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Two fair value estimates from the Simply Wall St Community cluster between US$86.32 and US$96.07, showing how differently individual investors can view Pinnacle West’s prospects. As you weigh those views against the highlighted risk of long term stranded fossil fuel assets, it is worth considering how such exposure could influence future earnings resilience and capital needs.

Explore 2 other fair value estimates on Pinnacle West Capital - why the stock might be worth as much as 9% more than the current price!

Build Your Own Pinnacle West Capital Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Pinnacle West Capital research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Pinnacle West Capital research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Pinnacle West Capital's overall financial health at a glance.

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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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