Pinnacle West Vs. Avista: Why I'm Upgrading AVA

Joseph E. Jones1.09K FollowersFollow5ShareSavePlay(13min)Comment(1)SummaryPinnacle West's stock has re-rated to 21.9x forward earnings during a guided-down year, leaving little margin for error ahead of a politically charged rate case decision expected in Q4 2026.Avista disclosed a significant data center deposit on its Q4 call that could reshape the growth story for a utility trading below its historical valuation multiples.PNW's demand story in Arizona is real (5% sales growth, TSMC expanding), but the gap between spending and earning won't close until the rate case resolves.I'm upgrading AVA to Buy at ~$39 for its 5% yield, discounted valuation, and underappreciated pipeline optionality. PNW stays a Hold at ~$101. imaginima/iStock via Getty Images I last covered Pinnacle West (NYSE:PNW) and Avista Corporation (NYSE:AVA) in June 2025. At that time, the comparison boiled down to potentially faster growth with greater risk for PNW vs. greater stability but slower growthThis article was written byJoseph E. Jones1.09K FollowersFollowDr. Joseph E. Jones is a professor at The University of Southern Mississippi. He writes independently about portfolio construction from a dividend growth investment perspective. All analysis, views, and assertions expressed are solely his own and are not made in any official or representative capacity. They do not reflect the views, policies, or financial interests of The University of Southern Mississippi or any affiliated entities.

This research is produced fully outside the scope of Dr. Jones’s university employment. The University of Southern Mississippi does not sponsor, review, endorse, or influence this work, nor does it provide funding or other support related to these activities. Nothing herein should be construed as investment advice or as a recommendation to buy or sell any security. Readers are encouraged to consult a licensed professional before making investment decisions.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.