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Phillips 66 Stands Midway with 47% ‘Buy’ Ratings

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Analysts’ ratings for Phillips 66

In this series, we saw the ranking of refiners based on the “buy” ratings assigned by Wall Street analysts. We also looked at the analyst ratings for Delek US Holdings (DK), Marathon Petroleum (MPC), and Valero Energy (VLO). In this part, we’ll look at the fourth refiner, Phillips 66 (PSX), which has 47.0% “buy” ratings.

The graph below shows that seven (or 47.0%) of the 15 analysts covering PSX have rated it as a “buy” in June. Another six analysts (or 40.0%) have rated PSX as a “hold.” The remaining two analysts rated PSX as a “sell” or “strong sell.”

Compared to June 2017, analysts’ ratings for Phillips 66 have changed. This time last year, PSX had fewer “buy” ratings and more “hold” ratings. Also, the mean target price for PSX has risen 39.0% in the same period. 

Recently, Credit Suisse raised its target price on PSX from $115.00 per share to $122.00 per share. PSX’s mean price target of $123.00 per share implies an ~7.0% gain from the current level.

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Why most analysts rate Phillips 66 as a “buy”

PSX is poised to grow with modernization projects in its Refining segment and expansion projects in its Midstream and Chemicals segments. It has a series of projects under various phases of development. These projects are expected to increase the production of higher-value lighter and cleaner products, enhance logistics abilities, and increase chemical capacities. For more on this topic, please read Phillips 66 Continues on Its Growth Trajectory.

Further, PSX’s total-debt-to-total-capital ratio stood below the industry average in the first quarter. So, a majority of Wall Street analysts have rated PSX as a “buy” due to its diversified growth model and relatively lower debt.

Move to the next part to look at analysts’ ratings for HollyFrontier (HFC).

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