Pinnacle West (PNW) Rides on Investments, Clean Power Generation
Pinnacle West Capital Corporation’s PNW ongoing investments in generation, transmission and distribution lines will help serve customers efficiently. The company’s cost saving initiatives will keep the utility service rates low.
However, this Zacks Rank #2 (Buy) company has to face risks related to any unplanned outages in nuclear generation facilities.
Tailwinds
Pinnacle West has a capital plan of $5.32 billion for 2023-2025, at an average annual growth rate of 5-7%. The company projects long-term retail customer growth of 1.5-2.5% and weather-adjusted retail electricity sales improvement of 4.5-6.5%. For 2023, it expects retail electricity sales growth of 2-4%.
PNW expects new investments and establishment of businesses to increase demand for its services. Taiwan Semiconductor has increased investment from $12 billion to $40 billion for the new projects. Once fully constructed, these projects are expected to create a working space of nearly 3 million square feet and generate demand for electricity.
Pinnacle West is using new technology to provide high-quality services to customers and is working toward achieving cost savings, which will help keep customer rates low. The ongoing and planned future investments will assist the company in keeping its systems clean, and making its services affordable and reliable. They will also help develop innovative program to assist customers.
PNW continues to focus on enhancing its renewable capacity. During 2023-2025, the company is expected to invest $1.34 billion in boosting clean power generation. It will develop 1,600 megawatts of clean energy and storage, which are expected to be placed in service by 2024 for Arizona Public Service Company customers.
Headwinds
Pinnacle West has nuclear generation facilities that need to undergo thorough safety, security and other licensing requirements. The company will be affected by any unplanned outage in nuclear plants, stemming from safety concerns and the unexpected production stoppage.
Other Stocks to Consider
Some other top-ranked stocks from the same industry are Consolidated Edison ED, NiSource Inc. NI and NextEra Energy, Inc. NEE, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consolidated Edison’s long-term (three to five year) earnings growth rate is 2%. The Zacks Consensus Estimate for ED’s 2023 earnings per share (EPS) indicates an increase of 6.8% year over year.
NiSource’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for NI’s 2023 EPS implies an improvement of 8.2% from the previous year’s reported figure.
NextEra Energy’s long-term earnings growth rate is 8.38%. The Zacks Consensus Estimate for NEE’s 2023 EPS indicates growth of 7.2% year over year.
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Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
