Zacks Investment Research downgraded shares of Pinnacle West Capital Corp. (PNW) from OUTPERFORM to NEUTRAL on December 18, 2012, with a target price of $54.00.
We downgrade our recommendation on Pinnacle West Capital Corp. to Neutral from Outperform on account of continued slackness in economic environment. Pinnacle West posted weak top-and bottom line results in the third quarter 2012 with both lines trailing the Zacks Consensus Estimates due to lower electric sales and higher operating costs. However, the projected annual customer growth target of 2% from 2012 through 2015 might act as a tailwind for the company. The positive rate changes at Arizona Public Service and its renewable energy project the AZ Sun program can also boost returns. Regulatory pressure, weather-induced variability in demand and unplanned outages are generic risks which could hamper the prospects of the company.
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