PNW Short Sellers Hold Ground as Q2 Results Hit the Wire

Pinnacle West Capital arrives at its Q2 print today with short sellers still leaning bearish, borrow conditions tightening at the margin, and options traders remaining conspicuously unbothered by the downside.

Short interest has continued its recent climb. It now accounts for 7.8% of the free float — up 3.3% on the week and sitting near the top of its recent range. That is a meaningful level for a regulated utility, and the direction of travel has been consistently higher since mid-July. What has changed since the previous preview is the borrow market. Availability has tightened sharply, falling roughly 50% over the past week to 221% — still loose enough to pose no squeeze risk, but the move itself signals fresh short demand entering the lending pool. Cost to borrow has risen 21% over the same period to 0.54%, its highest point in the 30-day window, though it remains negligible in absolute terms.

Options positioning continues to lean in the opposite direction. The put/call ratio is running at 0.22, slightly below its 20-day average of 0.25 and well clear of the 52-week high of 0.77. That is an unusually call-heavy skew for a stock that is down 7.8% over the past month to $100.81. The divergence between options traders and short sellers remains the defining tension in the positioning picture. Peer utilities have broadly moved in the same direction — LNT, DUK, SO, and AEP all fell 3–4% on the week — confirming this is sector-wide pressure rather than a PNW-specific event.

The analyst community is broadly neutral, with the mean price target at $105.79 against the current price of $100.81. BMO Capital trimmed its target to $104 earlier in July while maintaining a Market Perform rating, consistent with a Street view that the stock is fairly priced rather than cheap. Bulls point to 5.2% retail sales growth, a 2.4% customer base expansion, and management's reaffirmed 4–6% long-term sales outlook underpinned by data-center-driven load growth in the Phoenix metro. Bears flag a roughly 10% year-over-year earnings decline driven by rising operating costs and the overhang of the Arizona Public Service rate case, which has introduced a bias toward negative EPS revisions for 2026 and 2027. The ORTEX short score has ticked up to 63.3 from 57 a week ago, a meaningful move that corroborates the recent short-interest build.

Today's print will test whether the load-growth story can absorb the cost headwinds convincingly enough to shift the rate-case narrative — and whether options traders' relative calm was well-founded or premature.