Pinnacle West Capital (PNW): Assessing Valuation After Years of Steady Shareholder Returns

Pinnacle West Capital (PNW) has been quietly rewarding patient investors, with the stock up about 7% over the past year and roughly 31% over the past 3 years, outpacing many utilities peers.

See our latest analysis for Pinnacle West Capital.

At the current share price of $88.36, Pinnacle West’s modest 2.65% 90 day share price return sits alongside a stronger three year total shareholder return of just over 31%, suggesting steady momentum rather than a speculative spike.

If you like the steady profile of regulated utilities but want to see what else the market is rewarding, it is worth exploring stable growth stocks screener (None results).

With earnings still growing and the share price only modestly above analysts’ targets, investors face a familiar dilemma: is Pinnacle West quietly undervalued, or is the market already pricing in its next leg of regulated growth?

Most Popular Narrative Narrative: 8% Undervalued

With Pinnacle West closing at $88.36 against a narrative fair value just above $96, the story leans toward patient upside grounded in regulated growth.

The ongoing influx of large commercial and industrial customers (notably data centers and manufacturers), along with a backlog of nearly 20 GW in uncommitted customer interconnection requests, signals substantial upside potential for volumetric sales and rate base expansion, positively impacting revenue and long term earnings.

Read the complete narrative.

Curious how steady customer growth, fatter margins, and a richer future earnings multiple all combine into that valuation gap? The full narrative unpacks the playbook.

Result: Fair Value of $96.07 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on Arizona regulation keeping pace and data center driven demand actually materializing, rather than leaving Pinnacle West with underutilized assets.

Find out about the key risks to this Pinnacle West Capital narrative.

Another Angle on Value

Our SWS DCF model paints a cooler picture, with Pinnacle West trading slightly above its estimated fair value of about $86.70. This implies the shares may be a touch overvalued rather than 8% cheap. Which storyline do you trust more: the growth narrative or the cash flow math?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Pinnacle West Capital for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 904 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Pinnacle West Capital Narrative

If you would rather dig into the numbers and challenge the story yourself, you can build a personalized view in under three minutes using Do it your way.

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.

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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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