Pinnacle West Capital (PNW) Premium Unwarranted; Goldman Reiterates Sell
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Price: $74.32 -0.3%
Rating Summary:
6 Buy, 9 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
6 Buy, 9 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Goldman Sachs today maintained a Sell rating on Pinnacle West Capital (NYSE: PNW) with a price target of $54.00. The firm also maintained a Neutral rating on shares of NV Energy (NYSE: NVE).
Commenting, analyst Neil Mehta said, "While both utilities exceeded consensus estimates and showed signs of economic progress in Arizona and Nevada respectively, we believe shares fully reflect improving fundamentals."
"PNW trades at a 0.6x/0.7x premium to small/mid cap peers on 2014/2015 P/E multiples – a premium we view as unwarranted given only in-line returns, below-average dividend growth and slowing EPS growth in 2015 due to the absence of major rate increases," cautioned the analyst.
Goldman has a Neutral view on utilities and prefers lower multiple names such as Edison International (NYSE: EIX), Xcel Energy Inc. (NYSE: XEL) and stocks with faster dividend growth such as Cleco Corporation (NYSE: CNL) and American Water Works (NYSE: AWK).
Related ETFs include Utilities Select Sector SPDR (NYSE: XLU) and Vanguard Utilities ETF (NYSE: VPU).
For an analyst ratings summary and ratings history on Pinnacle West Capital (NYSE: PNW) click here. For more ratings news on Pinnacle West Capital click here.
Shares of Pinnacle West Capital closed at $61.48 yesterday.
Commenting, analyst Neil Mehta said, "While both utilities exceeded consensus estimates and showed signs of economic progress in Arizona and Nevada respectively, we believe shares fully reflect improving fundamentals."
"PNW trades at a 0.6x/0.7x premium to small/mid cap peers on 2014/2015 P/E multiples – a premium we view as unwarranted given only in-line returns, below-average dividend growth and slowing EPS growth in 2015 due to the absence of major rate increases," cautioned the analyst.
Goldman has a Neutral view on utilities and prefers lower multiple names such as Edison International (NYSE: EIX), Xcel Energy Inc. (NYSE: XEL) and stocks with faster dividend growth such as Cleco Corporation (NYSE: CNL) and American Water Works (NYSE: AWK).
Related ETFs include Utilities Select Sector SPDR (NYSE: XLU) and Vanguard Utilities ETF (NYSE: VPU).
For an analyst ratings summary and ratings history on Pinnacle West Capital (NYSE: PNW) click here. For more ratings news on Pinnacle West Capital click here.
Shares of Pinnacle West Capital closed at $61.48 yesterday.
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