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Pinnacle West Capital Corp PNW

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Morningstar’s Analysis

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Pinnacle West Reports Strong Quarter as It Waits on Rate Case Decision

Charles Fishman, CFA Equity Analyst

Analyst Note

| Charles Fishman, CFA |

We are reaffirming our fair value estimate of $88 per share after Pinnacle West Capital reported strong 2021 first-quarter earnings but again declined to give earnings guidance due to the pending rate case for wholly owned Arizona Public Service. It is consistent with past practice for Pinnacle West to wait until after an Arizona Corporation Commission decision to provide guidance, and management indicated it will conduct an investor briefing after the rate case concludes.

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Company Profile

Business Description

Pinnacle West is a holding company whose principle subsidiary is Arizona Public Service. APS is a vertically integrated regulated utility that provides electric service to 1.3 million customers over a 35,000-square-mile service territory in Arizona, including the city of Phoenix. Approximately 35% of power sold comes from the company's 29% interest in the nearly 4-gigawatt Palo Verde nuclear plant. Operated by APS, Palo Verde is the largest nuclear plant in the U.S. APS has invested approximately $675 million in the utility-scale photovoltaic solar plants as part of the AZ Sun Program, resulting in 170 MW of solar capacity owned by APS and over 1,000 MW of contracted solar energy from power purchase agreements.

Contact
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ, 85072-3999
T +1 602 250-1000
Sector Utilities
Industry Utilities - Regulated Electric
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 6,026

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