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Will Rising Customer Demand Support PNW's Long-Term Earnings Growth?
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Key Takeaways
PNW's second-quarter 2026 customer growth reached 2.1%, while electricity sales rose 5.6%.
PNW expects 5-7% annual retail sales growth through 2030, driven by data centers and industrial customers.
PNW plans $7.95B in infrastructure investments through 2028 and targets long-term EPS growth of 5-7%.
Pinnacle West Capital Corp. (PNW - Free Report) is benefiting from rising electricity demand across its service territory. Its Arizona Public Service (“APS”) subsidiary benefits from higher electricity usage and economic development, supporting load growth and the need for additional generation and grid investments.
In the second quarter of 2026, APS customer growth reached 2.1%, weather-normalized sales rose 5.6%, total sales increased 9.6%, and commercial and industrial sales climbed 12.7%, driven by data centers and advanced manufacturing customers ramping up year over year. Higher customer demand supports load growth, revenues and PNW’s earnings potential.
PNW expects retail customer growth of 1.5-2.5% in 2026 and weather-normalized retail electricity sales rise of 4-6%. New large manufacturing facilities and data centers are projected to contribute 3-5% to sales growth in 2026. Through 2030, the company forecasts weather-normalized retail sales growth of 5-7%, with large commercial and industrial customers accounting for 4-6%.
Pinnacle West Capital is expanding its infrastructure to serve rising power needs. The company aims to invest $7.95 billion through 2028 in generation, transmission and distribution infrastructure to strengthen reliability and improve operational efficiency. PNW maintains the 2026 earnings guidance of $4.55-$4.75 per share and its long-term earnings growth target of 5-7%.
Thus, sustained customer growth and higher electricity usage can support sales, capacity investments and earnings over the longer term.
Rising electricity consumption encourages utilities to upgrade grid infrastructure, expand generation capacity and improve service reliability. These expenditures support new service connections, promote economic expansion and enhance the industry’s long-term growth potential.
Alliant Energy Corporation (LNT - Free Report) projects 60% electricity load growth by 2031, supported by rising demand from large customers, including data centers. Higher power requirements could drive investments in generation, energy storage and grid infrastructure while supporting earnings potential.
PPL Corporation (PPL - Free Report) reported a 31.8-gigawatt (GW) Pennsylvania data center pipeline and a 13.7 GW Kentucky economic development pipeline in the second quarter of 2026, supporting generation investments and long-term earnings growth.
The Zacks Rundown on PNW
PNW’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 EPS indicates a decrease of 6.34% and an increase of 18.21%, respectively, year over year.
Image Source: Zacks Investment Research
Debt to Capital
PNW's debt-to-capital currently stands at 61.64%, lower than the Zacks Utility - Electric Power industry’s 62.33%.
Image Source: Zacks Investment Research
PNW Stock’s Price Performance
In the past three months, Pinnacle West Capital’s shares have plunged 9.4% compared with the industry’s 10.7% decline.
View the Zacks #1 Rank List
Image: Bigstock
Will Rising Customer Demand Support PNW's Long-Term Earnings Growth?
Key Takeaways
Pinnacle West Capital Corp. (PNW - Free Report) is benefiting from rising electricity demand across its service territory. Its Arizona Public Service (“APS”) subsidiary benefits from higher electricity usage and economic development, supporting load growth and the need for additional generation and grid investments.
In the second quarter of 2026, APS customer growth reached 2.1%, weather-normalized sales rose 5.6%, total sales increased 9.6%, and commercial and industrial sales climbed 12.7%, driven by data centers and advanced manufacturing customers ramping up year over year. Higher customer demand supports load growth, revenues and PNW’s earnings potential.
PNW expects retail customer growth of 1.5-2.5% in 2026 and weather-normalized retail electricity sales rise of 4-6%. New large manufacturing facilities and data centers are projected to contribute 3-5% to sales growth in 2026. Through 2030, the company forecasts weather-normalized retail sales growth of 5-7%, with large commercial and industrial customers accounting for 4-6%.
Pinnacle West Capital is expanding its infrastructure to serve rising power needs. The company aims to invest $7.95 billion through 2028 in generation, transmission and distribution infrastructure to strengthen reliability and improve operational efficiency. PNW maintains the 2026 earnings guidance of $4.55-$4.75 per share and its long-term earnings growth target of 5-7%.
Thus, sustained customer growth and higher electricity usage can support sales, capacity investments and earnings over the longer term.
Increasing Customer Demand Supports Utility Expansion
Rising electricity consumption encourages utilities to upgrade grid infrastructure, expand generation capacity and improve service reliability. These expenditures support new service connections, promote economic expansion and enhance the industry’s long-term growth potential.
Alliant Energy Corporation (LNT - Free Report) projects 60% electricity load growth by 2031, supported by rising demand from large customers, including data centers. Higher power requirements could drive investments in generation, energy storage and grid infrastructure while supporting earnings potential.
PPL Corporation (PPL - Free Report) reported a 31.8-gigawatt (GW) Pennsylvania data center pipeline and a 13.7 GW Kentucky economic development pipeline in the second quarter of 2026, supporting generation investments and long-term earnings growth.
The Zacks Rundown on PNW
PNW’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 EPS indicates a decrease of 6.34% and an increase of 18.21%, respectively, year over year.
Image Source: Zacks Investment Research
Debt to Capital
PNW's debt-to-capital currently stands at 61.64%, lower than the Zacks Utility - Electric Power industry’s 62.33%.
Image Source: Zacks Investment Research
PNW Stock’s Price Performance
In the past three months, Pinnacle West Capital’s shares have plunged 9.4% compared with the industry’s 10.7% decline.
Image Source: Zacks Investment Research
PNW’s Zacks Rank
PNW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.