Phillips 66 (PSX – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Phillip Jungwirth from BMO Capital maintained a Buy rating on the stock and has a $135.00 price target.
Phillip Jungwirth has given his Buy rating due to a combination of factors influencing Phillips 66’s performance and potential growth. A significant reason is the company’s substantial midstream business, which has seen impressive growth in EBITDA over the past decade. This segment now constitutes a considerable portion of Phillips 66’s overall EBITDA, indicating a strong valuation potential. The strategic initiatives proposed, such as selling or spinning off midstream assets, further highlight this segment’s value, suggesting a notable upside.
Additionally, while the refining segment has experienced some volatility, Phillips 66 has made strides in improving refining utilization and lowering operating costs. Despite these challenges, the company’s diverse business mix, including chemicals and marketing, offers balanced exposure with higher multiple businesses. The current market valuation does not fully account for this diversified potential, presenting an opportunity for re-rating and thus supporting the Buy recommendation.
In another report released today, TD Cowen also maintained a Buy rating on the stock with a $132.00 price target.
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