A Look at Phillips 66 Stock before Its 1Q17 Earnings Release

In this series, we’ve already looked at Phillips 66’s (PSX) 1Q17 estimates and refining margin expectation. Now we’ll evaluate PSX’s stock performance prior to its results, which are expected on April 28, 2017.

Since January 3, 2017, Phillips 66 (PSX) stock has fallen 13.2%. Crude oil prices have fallen 3.6%, and the US Gulf Coast WTI (West Texas Intermediate) 3-2-1 crack has fallen 7.1% year-to-date. The US Gulf Coast is a significant refining area for Phillips 66 (PSX) and accounted for around 34.0% of its crude oil throughput in 2016.

On February 3, 2017, Phillips 66 announced its 4Q16 earnings, which missed earnings estimates. For more on this, please refer to Phillips 66’s 4Q16 Results: What Happened to PSX’s Earnings?

To add to its woes, in February, the EIA (U.S. Energy Information Administration) announced a five-year high distillate inventory for the week ended February 3, 2017. That was followed by high gasoline inventory for the week ended February 10, 2017.

The adverse impact of PSX’s 4Q16 earnings and high gasoline and distillate inventories in the industry likely led to the fall in Phillips 66 stock.

Since January 3, 2017, HollyFrontier (HFC), Western Refining (WNR), and PBF Energy (PBF) have fallen 21.0%, 14.0%, and 28.0%, respectively. For exposure to mid-cap stocks, you can consider the SPDR S&P MidCap 400 ETF (MDY). MDY has a ~4.0% exposure to energy sector stocks, including HFC and WNR.

In the next part of this series, we’ll see how analysts are rating Phillips 66 before its 1Q17 earnings release.