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What Analysts Recommend for Phillips 66

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Updated

63% of analysts rated PSXP a “buy”

Of the analysts surveyed by Reuters, 63% rated Phillips 66 Partners (PSXP) a “buy,” and the remaining 37% rated it a “hold.” None of the surveyed analysts gave a “sell” recommendation to PSXP. On February 5, 2018, Barclays cut PSXP’s price target from $59 to $56.

The consensus target price for Phillips 66 Partners is $59. PSXP is currently trading at $51.61. If PSXP reaches its target price, it would imply a 14% price return for investors in a year.

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The above graph compares analysts’ recommendation for Phillips 66 Partners with peers Valero Energy Partners (VLP), PBF Logistics (PBFX), and Andeavor Logistics (ANDX). PBF Logistics got “buy” recommendations from 100% of the surveyed analysts, whereas 75% of analysts rated Andeavor Logistics a “buy.”

PSXP’s capital projects

Phillips 66 Partners continues to work on the following growth projects:

  • PSXP has received final approval for the construction of a new isomerization unit at the Phillips 66’s (PSX) Lake Charles refinery. The $200 million project is expected to be completed in 2019.
  • The company plans to complete capacity expansion at Sand Hills Pipeline joint venture, in which PSXP owns a one-third interest, in 2H18.
  • Work continues on the Bayou Bridge Pipeline extension, in which PSXP owns a 40% interest. The permitting is complete, and construction has begun on this project. The project is expected to become operational in 2H18.
  • The Sacagawea Pipeline, in which PSXP owns a 49.5% interest, is expected to be completed in 2H18. The pipeline links natural gas production in Mountrail County to gathering and processing capacity in McKenzie County in North Dakota.

The above projects should contribute to Phillips 66 Partners’ future earnings.

For the latest coverage on MLP earnings, please refer to Market Realist’s Energy MLPs page.

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