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Brace Yourself for Phillips 66’s 3Q17 Earnings

PART:
1 2 3 4 5 6 7
Part 7
Brace Yourself for Phillips 66’s 3Q17 Earnings PART 7 OF 7

Short Interest in Phillips 66 ahead of 3Q17 Earnings

Short interest in Phillips 66

Short interest in Phillips 66 (PSX) expressed as a percentage of outstanding shares has fallen from 1.6% at the end of August to the current level of 1.4%. Usually, everything else being equal, a fall in short interest could indicate a decrease in the bearish sentiment for the stock. In the same period, Phillips 66 stock rose 13.0%.

Short Interest in Phillips 66 ahead of 3Q17 Earnings

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Why the decline in bearish sentiment?

The decline in short interest in Phillips 66 since the end of August could be attributed to higher refining cracks. The benchmark crack, the US Gulf Coast WTI (West Texas Intermediate) 3-2-1 crack, has risen abruptly due to Hurricane Harvey. We looked at this in Part 3 of this series. Refining cracks significantly impact the earnings of downstream companies.

Peers’ short interest

HollyFrontier (HFC) and PBF Energy (PBF) have also witnessed a fall in short interest of 0.10% and 4.2%, respectively, since the end of August. Currently, HFC and PBF have short interest of 6.7% and 17.3%, respectively. However, Valero Energy (VLO) and Andeavor (ANDV) saw their short interests rise 1.0% and 0.40%, respectively, since the end of August. Their short interests are currently 4.9% and 3.0%, respectively. In the stated period, HFC and PBF rose sharply by 13.7% and 14.7%, respectively, and VLO and ANDV rose 14.1% and 4.7%, respectively.

Pre-earnings series review

In this series, we’ve looked at PSX’s EPS (earnings per share) estimate and refining margin prospects for 3Q17. We’ve also evaluated the performance of PSX stock and the moving averages trend. Then we calculated the stock price forecast range for PSX for the 14-day period before October 27, 2017, based on its current implied volatility. In the previous part, we looked at changes in analyst ratings for PSX. We concluded the series with a review of short interest in PSX before its earnings.

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