Pinnacle West Capital (PNW) AI Stock Analysis

• Market Cap: $12.13B
• Dividend Yield: 4.15%
• Average Volume (3M): 1.26M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.16
• Revenue Growth: 5.70%
• EPS Growth: -8.25%
• Country: US
• Employees: 6,400
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.13
• Shares Outstanding: 120,905,390
• 10 Day Avg. Volume: 1,421,463
• 30 Day Avg. Volume: 1,255,595
• PEG Ratio: -4.61
• Price to Book (P/B): 1.51
• Price to Sales (P/S): 1.99
• P/FCF Ratio: -12.95
• Enterprise Value/Market Cap: 2.46
• Enterprise Value/Revenue: 5.59
• Enterprise Value/Gross Profit: 16.05
• Enterprise Value/Ebitda: 14.02
• 1Y Price Target: $100.78
• Price Target Upside: 0.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.67
• Revenue Forecast (FY): $5.56B

• Rating: 65 Neutral
• Price Target: $108.00 ▲(7.68% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is led by solid technical momentum and constructive earnings-call outlook (reiterated guidance, strong demand growth and improved liquidity planning). Offsetting these positives are weaker cash-flow quality with reliance on external funding, leverage-related constraints and some uncertainty from abrupt 2025 statement shifts, while valuation is reasonable but not clearly cheap.

Positive Factors

Regulated franchise with durable load and customer growth

Steady weather-normalized sales growth (5% in 2025) and 2.4% customer growth reflect durable demand drivers, including accelerating commercial & industrial additions. Persistent load growth supports long-term rate-base expansion and predictable regulated revenue through 2028–2030.

High operational reliability and resource execution

Top-tier generation performance and on-time resource completions (including >400 MW added) reduce outage risk and improve system capacity. Sustained reliability and execution strengthen regulatory and customer credibility, enabling smoother recovery of costs and supporting long-term operational margins.

Strengthened liquidity and de-risked near-term funding

Material pre-funding and extended credit lines materially lower refinancing risk for planned capital spend. Expanded revolvers and priced equity improve cash flexibility, supporting the company’s multi-year rate-base growth plan and reducing the likelihood of disruptive equity issuance.

Negative Factors

Elevated leverage and balance-sheet uncertainty

Meaningful leverage is typical for utilities but constrains financial flexibility; the noted abrupt 2025 balance-sheet shift creates uncertainty about reported obligations and asset base. High leverage can limit ability to absorb shocks or accelerate growth without more external funding.

Weak and volatile free-cash-flow generation

Persistent negative free cash flow through multiple years indicates reliance on external financing for capital-intensive investments. Although 2025 shows positive FCF, the volatility and falling operating cash flow reduce confidence in sustainably funding capex, dividends, or unexpected costs internally.

Regulatory timing and uncommitted-load execution risk

A large uncommitted development queue and pending rate-case outcomes create material uncertainty on timing and scale of future capital additions and timely cost recovery. Regulatory lag or unfavorable ROE/formula outcomes could compress returns and delay cash conversion of planned investments.

Pinnacle West Capital Business Overview & Revenue Model

Company Description

Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. The company engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities. Its transmission facilities include approximately 5,814 pole miles of overhead lines and approximately 74 miles of underground lines; and distribution facilities comprise approximately 11,258 miles of overhead lines and approximately 22,821 miles of underground primary cable, as well as owns and maintains 475 transmission and distribution substations. The company also owns or leases approximately 6,323 megawatts of regulated generation capacity. It serves approximately 1.3 million customers. Pinnacle West Capital Corporation was incorporated in 1985 and is headquartered in Phoenix, Arizona.

How the Company Makes Money

Pinnacle West Capital generates revenue primarily through the sale of electricity to residential, commercial, and industrial customers. The company's revenue model is largely based on regulated utility operations, where earnings are derived from the rates approved by state regulatory agencies. Key revenue streams include retail electricity sales, which account for a significant portion of revenues, and ancillary services related to energy distribution. Additionally, Pinnacle West capitalizes on investments in renewable energy projects, which can provide additional revenue through long-term power purchase agreements. The company also engages in demand-side management programs that incentivize energy efficiency, further contributing to its earnings. Strategic partnerships with renewable energy developers and adherence to regulatory frameworks for rate adjustments are significant factors that bolster its financial performance.

Pinnacle West Capital Financial Statement Overview

Summary

Steady, utility-like earnings and revenue growth support the profile (income statement strength), but persistently negative free cash flow through 2024 and meaningful leverage constrain flexibility. The abrupt 2025 balance sheet and cash flow shifts add uncertainty around durability and capital funding.

Income Statement

Revenue has grown steadily from 2020 to 2024, with another step-up in 2025. Profitability has remained solid for a regulated utility: net income has been relatively stable (about $500–$620M annually) and margins in 2022–2024 were consistent (net margin ~11–12% with stable operating profitability). Offsetting this, profitability is below the stronger 2020–2021 margin levels, and 2025 margin detail is limited in the provided data.

Balance Sheet

The company operates with meaningful leverage, which is typical for regulated utilities but still a constraint: debt-to-equity was elevated in 2022–2024 (roughly 1.5–1.7x). Equity has grown gradually over time, supporting asset growth, and returns on equity have been steady in the high single-digits to ~10% range (2020–2024). A notable concern is the sharp drop in reported total debt and total assets in 2025 versus 2024, suggesting a major balance sheet change or data inconsistency that increases uncertainty.

Cash Flow

Cash generation quality is mixed. Operating cash flow was strong in 2022–2024 (roughly $1.2–$1.6B), but free cash flow was negative in 2020–2024, indicating ongoing capital spending needs and external funding reliance. 2025 shows positive free cash flow (~$403M), but operating cash flow also fell sharply versus prior years and free cash flow growth is reported as highly volatile, which reduces confidence in durability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.34B	5.12B	4.70B	4.32B	3.80B
Gross Profit	1.36B	2.14B	1.84B	1.71B	1.70B
EBITDA	2.13B	2.07B	1.78B	1.65B	1.70B
Net Income	616.53M	608.81M	501.56M	483.60M	618.72M
Balance Sheet
Total Assets	31.68B	26.10B	24.66B	22.72B	22.00B
Cash, Cash Equivalents and Short-Term Investments	9.85M	3.84M	4.96M	4.83M	9.97M
Total Debt	17.85B	11.05B	10.30B	8.88B	8.18B
Total Liabilities	24.60B	19.25B	18.38B	16.56B	15.98B
Stockholders Equity	7.05B	6.75B	6.18B	6.05B	5.91B
Cash Flow
Free Cash Flow	-819.52M	-639.37M	-638.67M	-466.05M	-613.46M
Operating Cash Flow	1.81B	1.61B	1.21B	1.24B	860.01M
Investing Cash Flow	-2.58B	-1.93B	-1.69B	-1.62B	-1.39B
Financing Cash Flow	775.09M	322.69M	486.68M	371.47M	476.92M

Pinnacle West Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 100.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNW, the sentiment is Positive. The current price of 100.3 is above the 20-day moving average (MA) of 96.68, above the 50-day MA of 92.30, and above the 200-day MA of 89.08, indicating a bullish trend. The MACD of 2.28 indicates Negative momentum. The RSI at 69.92 is Neutral, neither overbought nor oversold. The STOCH value of 78.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PNW.

Pinnacle West Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WEC	70 Outperform	$38.07B	24.32	11.96%	3.38%	11.88%	29.76%
EVRG	67 Neutral	$19.27B	22.84	8.48%	3.72%	0.11%	-0.52%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
PNW	65 Neutral	$12.13B	19.84	8.93%	4.15%	5.70%	-8.25%
LNT	65 Neutral	$18.60B	23.02	11.30%	3.11%	7.76%	23.48%
OGE	64 Neutral	$10.14B	21.14	9.79%	3.82%	18.03%	29.46%
DTE	62 Neutral	$30.80B	21.03	12.16%	3.45%	19.42%	-9.68%

Pinnacle West Capital Corporate Events

Pinnacle West Highlights Growth and Clean-Energy Utility Franchise

In March 2026, Pinnacle West planned to meet with securities analysts and investors, using an investor presentation that highlighted the scale of its regulated electric utility operations and the strength of its Arizona franchise. The materials underscored the company’s sizable asset base and clean-energy mix, positioning it as a key power provider in a high-growth region.

The release detailed continued robust customer and sales growth through 2025, driven by strong residential expansion and accelerating commercial and industrial demand, including high-tech and large C&I users. Management emphasized Arizona’s economic attractiveness, diversified industrial base, and supportive demographic trends as foundations for long-term load growth, which are central to the company’s future revenue trajectory and capital planning.

The most recent analyst rating on (PNW) stock is a Hold with a $97.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Capital posts stronger 2025 earnings, growth

Pinnacle West Capital reported that for 2025 it generated consolidated net income attributable to common shareholders of $616.5 million, or $5.05 per diluted share, modestly above the $608.8 million, or $5.24 per share, posted in 2024. For the fourth quarter ended Dec. 31, 2025, it recorded net income of $15.4 million, or $0.13 per diluted share, reversing a net loss of $6.8 million, or $0.06 per share, in the same period a year earlier.

Management said 2025 results were lifted by stronger customer usage and growth, higher transmission revenues and benefits from a 2022 rate case, partially offset by milder weather and rising interest, pension, operations and maintenance and amortization costs. Arizona Public Service, the main utility subsidiary, saw customer growth of 2.4% and weather-normalized retail sales growth of 5.0% in 2025, while peak demand climbed more than 5% during what was described as Arizona’s third-hottest summer on record.

The company stressed that its diverse generation fleet maintained high reliability as APS customers set three new all-time peak demand records, keeping the utility in the top quartile nationally for reliability metrics. Despite this operational strength and rapid regional expansion, management noted APS continues to earn well below its allowed return, highlighting the importance of favorable regulatory outcomes and timely cost recovery to support ongoing investment.

Pinnacle West also underscored efforts to mitigate affordability pressures, reporting it connected customers to about $70 million in assistance in 2025 and has contributed more than $6 million to statewide heat-relief initiatives and related services since 2021. These initiatives, along with digital upgrades and service improvements, helped APS achieve first-quartile rankings in several J.D. Power and Escalent customer satisfaction and digital experience studies, which the company said positions it well for 2026.

The most recent analyst rating on (PNW) stock is a Hold with a $96.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Expands Credit Facilities and Executive Incentives

On February 18, 2026, Pinnacle West Capital Corporation entered into a third amended and restated five-year unsecured revolving credit facility, increasing its borrowing capacity from $200 million to $300 million and extending maturity to February 18, 2031, for general corporate purposes including backing commercial paper and letters of credit. On the same date, subsidiary Arizona Public Service Company upsized and extended its own unsecured revolving credit facility from $1.25 billion to $1.7 billion through 2031, while on February 17–18, 2026 the board and its human resources committee approved 2026 incentive plans for top executives that tie payouts to APS earnings and operational metrics such as safety, reliability, customer experience, nuclear performance and financial health, with substantial upside potential but subject to clawback and earnings thresholds.

Both new credit facilities carry interest rates linked to the borrowers’ senior unsecured debt ratings and include customary covenants on leverage, lien restrictions, ownership of APS and change-of-control and cross-default provisions, providing enhanced liquidity but preserving lender protections. The executive and Palo Verde employee incentive structures are designed to align leadership compensation with performance across key business units and regulatory outcomes, potentially influencing management’s focus on earnings quality, operational reliability and nuclear safety while reinforcing shareholder and stakeholder interests.

The most recent analyst rating on (PNW) stock is a Hold with a $89.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.