PNW Should I Buy
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Pinnacle West Capital Corp (PNW) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some recovery in Q4 2025 earnings and customer growth, the financial performance is mixed, with significant YoY declines in net income and EPS. Additionally, the technical indicators suggest a neutral to slightly bullish trend, but the lack of strong proprietary trading signals and increased insider and hedge fund selling indicate caution. For a long-term investor, it may be prudent to wait for clearer positive catalysts or improved financial performance before committing to this stock.
The technical indicators show a mixed picture. The MACD is positive and contracting, suggesting a bullish trend. The RSI is neutral at 66.869, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200). The stock is trading near its pivot point (98.635) with resistance at 100.27 and support at 97.001. Overall, the trend is slightly bullish but not strongly compelling.
Customer growth of 2.4% and infrastructure investments to meet rising electricity demand are positive signs for long-term growth. Analysts have raised price targets recently, with Citi increasing it to $109.
Hedge funds and insiders are selling significantly, with hedge fund selling up 843.58% and insider selling up 325.01%. Financial performance in Q4 2025 showed a YoY decline in net income (-325.62%) and EPS (-316.67%). The utilities sector has underperformed the S&P recently, and some analysts remain cautious due to delayed impacts of regulatory changes.
In Q4 2025, revenue increased by 2.99% YoY to $1.13 billion, but net income dropped by 325.62% YoY to $15.4 million. EPS also fell by 316.67% YoY to $0.13. Gross margin slightly decreased to 42.62%, down 0.40% YoY. While revenue growth is positive, the significant decline in profitability is concerning.
Analyst sentiment is mixed. Citi raised its price target to $109 with a Neutral rating, while Morgan Stanley increased it to $96 with an Equal Weight rating. RBC Capital raised its target to $103 but maintained a Sector Perform rating. Wells Fargo lowered its target to $91, citing a cautious stance. Analysts highlight robust load growth and infrastructure investments but remain cautious due to delayed regulatory impacts and sector underperformance.
