PNW Stock Forecast & Price Target

Pinnacle West Capital showcases a robust financial outlook, highlighted by a 5.2% increase in retail sales and a 2.4% growth in its customer base, reflecting strong demand for electricity within its service area. The company is positioned for continued growth, as management reaffirms expectations of 4-6% weather-normalized sales growth and customer growth forecasts of 1.5-2.5%. Additionally, anticipated capital expenditures are conservatively projected to increase by 2% year-over-year, with significant potential from future transmission projects that are set to drive further economic development in the region.

Pinnacle West Capital reported a year-over-year earnings decline of approximately 10%, driven primarily by increased operating expenses and other liabilities, which outweighed positive contributions from operating margins and interest adjustments. The release of the procedural schedule in the Arizona Public Service rate case appears to have negatively influenced investor sentiment, resulting in shares underperforming by about 500 basis points in the latter half of July. Additionally, there is a prevailing expectation among investors that earnings per share will be adversely affected in 2026 and 2027, contributing to a pessimistic outlook for the company's stock performance.