Pinnacle West Hits 52-Week High On New Rates Implementation

Share price of Pinnacle West Capital Corporation (NYSE:PNW) , an electric and power company, hit a new 52-week high of $90.47 on Aug 28, eventually closing a tad lower at $90.44. The stock has delivered a one-year return of about 23.9% compared with the industry’s gain of 11.4%.

In the past 52 weeks, Pinnacle West’s share price has ranged from a low of $70.86 to a high of $90.47. Average volume of shares traded in the last three months is approximately 679.08 thousand.

Factors Behind the Drive

Pinnacle West’s shares have been on the rise following strong second-quarter 2017 results on Aug 03. The company posted earnings per share of $1.49, beating the Zacks Consensus Estimate of $1.16 by 28.5%. Quarterly earnings increased 38% year over year due to higher electricity usage as a result of hotter weather.

The company has been a strong performer as evident from its positive average earnings surprise of 15.47% in the trailing four quarters. The long-term earnings growth of the company is presently pegged at 5.20%.

Pinnacle West continues to focus on modernizing the distribution grid, investing in flexible generation and advancing customer experience, which positions it as a leader in grid automation and technology integration.

Most recently, Pinnacle West’s unit, Arizona Public Service (APS) announced that its first rate review agreement after five years, got approved by the Arizona Corporation Commission (ACC). This new rate review agreement that became effective Aug 19 is anticipated to improve revenues in APS’ territory by almost 3.3%, an increase in residential bill by approximately 4.5% or about $6 per month, over the coming period. (Read more: Pinnacle West's Unit Gets Rate Review Approval in Arizona)

The company expects to invest heavily in infrastructure upgrades to serve expanding customer base. Additionally, the company anticipates that its continued savings throughout 2017 will reduce cost for customers and improve the competitiveness of its retail rates.

Zacks Rank and Key Picks

Pinnacle West currently carries a Zacks Rank #3 (Hold). Investors can consider better-ranked stocks from the same industry like Pattern Energy Group Inc. (NASDAQ:PEGI) , Duke Energy Corporation (NYSE:DUK) and Ameren Corporation (NYSE:AEE) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Pattern Energy posted an average surprise of 59.21% in the trailing last four quarters. The company’s 2017 estimates increased significantly from a loss of 10 cents to earnings of 27 cents in the last 90 days.

Duke Energy posted an average surprise of 1.21% in the trailing last four quarters. The company’s 2017 estimates increased by a cent to $4.60 per share in the last 90 days.

Ameren posted an average surprise of 2.83% in the trailing last four quarters. The company’s 2017 estimates increased by 3 cents to $2.80 in the last 90 days.

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