Core Viewpoint - Pinnacle West Capital Corporation (PNW) is focused on enhancing its electricity generation portfolio through significant capital investments while facing regulatory and weather-related challenges [1] Group 1: Capital Investments and Growth - PNW has a capital plan of $6 billion for the years 2024-2026, with nearly $1.2 billion allocated for transmission investments during the same period [2] - The company plans to invest approximately $2.2 billion to enhance clean power generation from 2024 to 2026 [3] - The Metro Phoenix service region is experiencing growth in commercial activities, with new data centers expected to create demand for 640 megawatts of electricity by 2035 [4] Group 2: Regulatory and Environmental Challenges - PNW is subject to numerous environmental laws and regulations, which may increase operational costs and impact business if compliance is not met [5] - Mild weather conditions can lead to lower power sales, potentially resulting in decreased revenues, earnings, and cash flow [6] Group 3: Stock Performance - PNW shares have increased by 11.5% over the past three months, outperforming the industry average growth of 1% [7]

Pinnacle West (PNW) came out with quarterly earnings of $1.76 per share, beating the Zacks Consensus Estimate of $1.31 per share. This compares to earnings of $0.94 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 34.35%. A quarter ago, it was expected that this power company would post a loss of $0.02 per share when it actually produced earnings of $0.15, delivering a surprise of 850%. Over the last four quarters, the company ...

Pinnacle West Capital Corporation (PNW) reported second-quarter 2024 earnings of $1.76 per share, which beat the Zacks Consensus Estimate of $1.31 by 34.4%. The bottom line also increased 87.2% from the year-ago quarter's figure of 94 cents. Total Revenues Sales for the quarter totaled $1.31 billion, which surpassed the Zacks Consensus Estimate of $1.22 billion by 7.6%. The top line also increased 17% from $1.12 billion recorded in the year-ago quarter. Operational Highlights Total operating expenses were $ ...

The Zacks Consensus Estimate for second-quarter sales is pinned at $1.13 billion, indicating year-over-year growth of 1.2%. Pinnacle West Capital continues to increase its shareholders' value through dividend payments. Currently, the company's quarterly dividend is 88 cents per share, resulting in an annualized dividend of $3.52 per share, up 1.7% from the previous level of $3.46. PNW's current dividend yield is 4.65%, better than the utility electric power industry's 3.74%. Pinnacle West Capital Corporatio ...

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits. Another notable valuation metric for PNW is its P/B ratio of 1.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, OGE h ...

The Federal Reserve has struggled to curb inflation despite adopting a strict monetary tightening campaign. This has reignited fears among Americans that the economy could slip into a recession. The survey's one-year outlook for inflation remained unchanged at 3.3% in June, which was also sharply above the 2.3-3% range seen in the two years prior to the pandemic. Inflation declined sharply in 2023 before resuming its climb in the first quarter. However, it showed signs of cooling in April and maintained the ...

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Demand Drivers and Growth Potential - The demand for electricity in Phoenix is expected to grow significantly due to population growth, manufacturing expansion, and the establishment of data centers, with Phoenix projected to have a population growth rate of 5.66% from 2020 to 2024, compared to the national average of 1.42% [34][33] - PNW's growth is anticipated to come from three main sources: positive adjustments from rate cases, increased rate base, and operating cost efficiencies [39][21] - The company has a substantial growth pipeline, with an estimated total investment opportunity of over $5 billion in transmission assets over the next ten years [20][46] Financial Performance and Valuation - PNW is trading at 10.52X forward EBITDA, which is lower than the sector average of 12.08, indicating a potentially undervalued position in the market [15][55] - The company's rate base is expected to grow from $11.9 billion in 2022 to $16.1 billion in 2026, representing a 35% increase [60][61] - Operating and maintenance expenses have increased at a rate of 1.86% annually over the last seven years, which is significantly lower than the CPI inflation rate of 3.5% [40][64] Operational Competence and Market Position - PNW has demonstrated a solid track record in translating asset growth into shareholder value, with dividends increasing steadily for decades [27][26] - The company has maintained a competitive edge by providing reliable and affordable electricity, which is crucial for sustaining its territorial advantage [51][52] - Despite the stock price underperformance since 2020, PNW has shown strong fundamentals, with cash flow and dividends per share continuing to grow [54][67]

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. It also includes access to the Zacks Style Scores. What are the Zacks Style Scores? The Zacks Style S ...