Pinnacle West Capital (PNW) has received a new Hold rating, initiated by BMO Capital analyst, James Thalacker.
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James Thalacker’s rating is based on the current regulatory environment and the challenges Pinnacle West Capital faces in navigating it. The company is expected to go through an important rate case in Arizona, and the outcome of this case, along with the implementation of new FRP rules, will be crucial for its future performance.
While there is potential for Pinnacle West to become a key utility holding, the regulatory execution over the next 12-18 months is critical and may limit the stock’s multiple expansion in the short term. The stock is currently trading at a slight premium compared to its peers, and any regulatory proceedings could skew the risk/reward balance to the downside. Therefore, James Thalacker has given a Hold rating, reflecting a cautious stance until these regulatory hurdles are successfully addressed.
In another report released on May 1, Wells Fargo also reiterated a Hold rating on the stock with a $98.00 price target.
Based on the recent corporate insider activity of 50 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PNW in relation to earlier this year.