PNW
Pinnacle West Capital Corporation
$96.80
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 19.5% above fair value
You pay
$96.59
Bear
$70.70
Fair
$80.80
Bull
$90.90
Bear
$70.70
-26.8%
$5.05 × 14x P/E
Fair
$80.80
-16.3%
$5.05 × 16x P/E
Bull
$90.90
-5.9%
$5.05 × 18x P/E
Adjust Assumptions
16.0x
5.05$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
19.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$106.86
Divergence from AlphaVal
24%
Summary
Applying a 16x P/E to adjusted EPS of $5.05, the base-case value is $80.80 per share. DDM cross-check: $55.69.
Warnings
Dividend-based valuation: $55.69 (below our primary estimate by 31%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples