Analyzing Phillips 66’s Stock Price Forecast



Implied volatility in Phillips 66

We started this series by discussing Phillips 66’s (PSX) segmental earnings in the fourth quarter. We discussed the company’s stock performance after the earnings were released. In the previous part, we discussed how analysts rated Phillips 66.

In this part, we’ll analyze the changes in Phillips 66’s implied volatility. We’ll also estimate Phillips 66’s stock price range for the seven days ending February 15.

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Phillips 66 reported its fourth-quarter earnings on February 8. After Phillips 66’s earnings, the implied volatility fell by 4.0 percentage points to the current level of 23.8%. The implied volatility is lower than the 30-day average implied volatility in Phillips 66, which was 27.9%. On February 8, Phillips 66’s stock price rose 1.9%.

Expected price range

Considering Phillips 66’s implied volatility of 23.8% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), the stock price could close between $96.6 and $90.4 per share in the seven days ending on February 15.

Peers’ implied volatility

Like the trend in Phillips 66, the implied volatility in Valero Energy (VLO) fell by 0.3 percentage points compared to the previous day to 26.6% on February 8. The implied volatility in HollyFrontier (HFC) and Delek US Holdings (DK) fell by 0.2 percentage points each to 38.5% and 43.6%, respectively.

If we consider these refiners’ stock prices, then Delek US Holdings and HollyFrontier fell 1.3% and 1.5%, respectively, on February 8. However, Valero Energy rose 0.3% on February 8.


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