J.P. Morgan Reiterates Neutral Rating On Pinnacle West

According to J.P. Morgan, Pinnacle West Capital PNW Neutral rating is reiterated. J.P. Morgan said that it recently met with PNW management to discuss the company's rate case filing and came away with the impression that the regulatory environment in Arizona continues to improve, which should be supportive throughout the upcoming rate case cycle. “However, we remain cautious on the level of ROE that the company would be able to achieve after completing the rate case, as well as on the future recovery of capital spending, and project ~9% earned ROE in 2013. If PNW is able to negotiate trackers that mitigate regulatory lag in the future, there could be upside to our estimates. However, we believe that it is too early in the process to get more constructive, and the shares appropriately reflect the regulatory uncertainty associated with the rate case. Accordingly, we maintain our Neutral rating, and would monitor the regulatory process closely for signs of potential upside.” Pinnacle West Capital closed yesterday at $44.29.