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Phillips 66: Analysts’ Ratings and Target Price

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Analysts’ ratings for Phillips 66

Since Phillips 66’s (PSX) third-quarter earnings, the company has been rated by 18 Wall Street analysts. Among the analysts, eight (or 44%) recommended a “buy” or “strong buy,” ten (or 56%) recommended a “hold,” and none of the analysts recommended a “sell” or “strong sell.” Phillips 66’s mean target price stands at $130 per share, which implies a 31% gain from the current level.

Phillips 66 posted a strong set of numbers in the third quarter. The company’s earnings rose across its business segments and beat the estimate during the quarter. Phillips 66 is rapidly expanding its stable-income Midstream segment, as we discussed in the previous part. The expansion is aimed at offsetting the impact of volatile refining earnings. Also, the company’s cash flow from operations rose 45% YoY to $0.6 billion in the third quarter.

Phillips 66’s total debt-to-total capital ratio stood at 31% in the third quarter, which is lower than US refiners’ peer average—a favorable scenario for the company. Phillips 66 has many “buy” ratings likely due to its strong financials and growth activities.

Phillips 66 also has many “hold” ratings likely due to the stock’s premium valuations. Phillips 66 stock trades at 10.5x the forward PE ratio, which is above the peer average of 8.5x.

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Analysts’ ratings for Phillips 66’s peers

Phillips 66’s peers Delek US Holdings (DK), Valero Energy (VLO), and Marathon Petroleum (MPC) have been rated as a “buy” by 93%, 58%, and 100% of the analysts, respectively. HollyFrontier (HFC) and PBF Energy (PBF) have been rated as a “buy” by 24% and 44% of the analysts, respectively.

Next, we’ll discuss Phillips 66’s stock price forecast range for the next seven days after its earnings.

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