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Investing.com - Jefferies lowered its price target on Pinnacle West Capital (NYSE:PNW) to $109.00 from $110.00 on Tuesday, while maintaining a Buy rating on the utility company’s stock. Currently trading at $87.84, InvestingPro data shows the stock is slightly overvalued, though analyst targets range from $80 to $110, with 4 analysts recently revising earnings estimates upward.
The firm cited Pinnacle West’s positioning for a structural earnings inflection beginning in 2028, when formula rates will reduce lag and major projects will enter rates.
Jefferies projects an earnings per share compound annual growth rate (CAGR) of 7.8% for Pinnacle West , compared to the 7.0% consensus, supported by a $17.5 billion capital expenditure plan for 2025-2029, which exceeds the consensus estimate of $12.3 billion.
The investment firm expects this capital plan to drive 10.6% rate base growth, significantly higher than the 4.2% consensus estimate, with Arizona’s 4-6% sales growth contributing to the outlook.
Jefferies also highlighted Pinnacle West’s secured access to long-term natural gas supply via Energy Transfer’s 2029 pipeline expansion as "a unique differentiator supporting hyperscaler demand."
In other recent news, Pinnacle West Capital reported mixed financial results for Q2 2025. The company announced earnings per share (EPS) of $1.58, which narrowly missed the forecasted $1.60. However, revenue reached $1.36 billion, slightly exceeding expectations. Despite these results, BMO Capital raised its price target for Pinnacle West Capital to $98.00 from $96.00, while maintaining a Market Perform rating. In contrast, Mizuho downgraded the stock to Neutral from Outperform, citing concerns over regulatory lag. Mizuho also adjusted its price target to $90.00 from $102.00. These recent developments highlight differing analyst perspectives on the company’s future performance. Pinnacle West’s year-over-year earnings per share declined by approximately 10%, though BMO noted this was in line with management’s expectations.
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