Jefferies Initiates Buy Rating on Pinnacle West Capital

A report reveals Jefferies has initiated coverage of Pinnacle West Capital with a 'Buy' rating. Despite this, the average price target suggests a potential downside. Projections indicate a decrease in annual revenue and institutional shareholder increase, which could affect stock sentiment.

Date: 21-09-2024

AI Rating: 5

According to the report, Jefferies has initiated coverage of Pinnacle West Capital (PNW) with a 'Buy' recommendation. However, the average one-year price target for the stock is $88.00/share, indicating a 2.52% downside from the current closing price of $90.27/share. This discrepancy between the current price and the target can create uncertainty among investors.

The report highlights a projected annual revenue of $4,227MM, reflecting a significant decrease of 13.56%. This downturn in revenue may raise concerns about the company's ability to perform, which could negatively impact investor confidence.

On a positive note, the projected non-GAAP EPS stands at 4.64, providing a metric for potential earnings performance. In terms of sentiment among institutional investors, there has been a slight decrease of 4 owners or 0.36% in the last quarter, but the overall shares owned by institutions increased by 5.44% to 143,256K shares. This could signal growing confidence among existing institutional investors despite some fluctuations.

The put/call ratio of 0.27 further indicates a bullish outlook among options traders, which may provide some reassurance to prospective investors.

Several institutional shareholders have increased their allocations in PNW, with significant increases noted from firms such as Capital Research Global Investors and Barrow Hanley Mewhinney & Strauss. In particular, Capital Research increased its holdings by 13.17%, while Barrow Hanley raised its stake by 19.75% in the last quarter.

In conclusion, while Jefferies' 'Buy' recommendation adds positive sentiment, the projected decrease in revenue and the average price target suggest caution may be warranted among potential investors.

Stocks: PNW