UPDATE: Bank of America Downgrades Pinnacle West Capital on Difficult Regulatory Cycle Ahead
In a report published Friday, Bank of America analyst Brian Chin downgraded the rating on Pinnacle West Capital (NYSE: PNW) from Buy to Neutral, and lowered the price target from $59.00 to $55.00.
In the report, Bank of America noted, “We are downgrading shares of PNW to Neutral from Buy, with a revised price objective of $55. Our new PO reflects a 13.5x target PE multiple applied to our 2016 EPS estimate of $4.04. In our opinion, PNW's -0.5x current trading valuation discount (2016 PE) to its peer group is merited given: 1) a challenging rate case cycle ahead and 2) the continued adoption of distributed generation in the state.
"Our EPS estimates are unchanged at this time; our downgrade reflects our subjective assessment of the regulatory climate and relationships between Pinnacle West and key stakeholders.”
Pinnacle West Capital closed on Thursday at $54.50.
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|Jul 2014||CRT Capital||Maintains||Fairly Valued|
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