PNW
Pinnacle West Capital Corporation
$102.94
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 13.0% above fair value
You pay
$102.94
Bear
$79.69
Fair
$91.08
Bull
$102.46
Bear
$79.69
-22.6%
$5.46 × 14x P/E
Fair
$91.08
-11.5%
$5.46 × 16x P/E
Bull
$102.46
-0.5%
$5.46 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
18.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $102.38 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $91.08 per share.
Warnings
Dividend-based valuation: $55.78 (below our primary estimate by 36%). 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