PNW Stock Forecast & Price Target

Pinnacle West Capital reported a strong quarter, with retail sales increasing by 5.2% and a customer base growth of 2.4%, indicating robust demand for its electric utility services. The company conservatively estimates a 2% year-over-year increase in capital expenditures, while also affirming a long-term sales growth outlook of 4-6% and customer growth of 1.5-2.5%, suggesting solid operational fundamentals. Furthermore, the company's significant investment in clean energy sources, including a major stake in the Palo Verde nuclear plant, positions it well for sustainable growth in a transitioning energy market.

Pinnacle West Capital has experienced a year-over-year decline of approximately 10% in results, attributed to significant offsets such as rising operating and maintenance expenses, as well as other liabilities, despite minor improvements in operating margin and interest. The company’s shares underperformed by around 500 basis points in the latter half of July, largely due to a lower sentiment within the market following the announcement of the procedural schedule related to the APS rate case, leading to diminished EPS expectations for 2026 and 2027. Overall, these financial pressures contribute to a negative outlook for Pinnacle West Capital's stock performance moving forward.