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Phillips 66 Common Stock (PSX)
NYSE:PSX
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Phillips 66
(NYSE:PSX)71Outperform
Positive Factors
Earnings Performance
PSX's 4Q EPS of ($0.15) topped estimates of ($0.25) as better Refining, Midstream, & Renewable Fuels results more than offset softer Chems and M&S.
Strategic Priorities
PSX refreshed its strategic priorities including returning >50% of CFO to shareholders, cost cuts, debt reduction, & $1B in Midstream & Chems EBITDA.
Negative Factors
Market Valuation
The market is not fully valuing PSX's total earnings potential while communication around M&A has been a headwind.
Phillips 66 (PSX) vs. S&P 500 (SPY)
Market Cap
$49.86B
Dividend Yield3.68%
Average Volume (3M)4.04M
Price to Earnings (P/E)24.5
Beta (1Y)0.84
Revenue Growth-2.81%
EPS Growth-68.00%
CountryUS
Employees14,000
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)4.93
Shares Outstanding407,698,330
10 Day Avg. Volume5,058,282
30 Day Avg. Volume4,036,555
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.36
Price to Cash Flow (P/CF)10.60
P/FCF Ratio18.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$135.50Price Target Upside10.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Phillips 66 Business Overview & Revenue Model
Company DescriptionPhillips 66 (PSX) is an American multinational energy company engaged in refining, midstream, chemicals, and marketing and specialties sectors. It operates a diverse set of assets from processing and transporting natural gas liquids to refining crude oil into petroleum products. The company also manufactures petrochemicals and markets products including gasoline, diesel, aviation fuels, and lubricants across the globe.
How the Company Makes MoneyPhillips 66 generates revenue through several key streams. The refining segment, which processes crude oil into gasoline and other fuels, accounts for a significant portion of its income. The midstream operations involve the transportation, storage, and processing of crude oil and natural gas liquids, providing stable fee-based revenue. The chemicals segment, operated through a joint venture with Chevron called Chevron Phillips Chemical Company, manufactures and sells petrochemicals and plastics. Additionally, the marketing and specialties division sells refined products at wholesale and retail levels, contributing to the company's earnings. Strategic partnerships, such as those in the chemicals sector, and a broad geographic presence also play vital roles in the company's profitability.
Phillips 66 Financial Statement Overview
Summary
Phillips 66 presents a strong financial position with consistent revenue growth and improving profitability metrics over the years. The balance sheet is stable, but future efforts should focus on further debt reduction. Cash flow management appears weak in the most recent period, which could pose a risk if not addressed.Income Statement
Phillips 66 demonstrated robust revenue growth over the years, particularly from 2021 to 2022 with a 34% increase. Gross profit margins have improved significantly, indicating effective cost management. However, net profit margins have been inconsistent, peaking in 2022 but declining in 2023. The EBIT and EBITDA margins show strong operational efficiency, although there was a notable decline in EBITDA margin in 2024.78
Positive
Balance Sheet
The company maintains a stable equity base with an equity ratio of approximately 37.8% in 2023, indicating a solid financial foundation. The debt-to-equity ratio has been manageable, although there is room for improvement in reducing total debt. Return on equity remains strong, reflecting good profitability in relation to shareholder's equity.72
Positive
Cash Flow
Cash flow metrics for Phillips 66 show fluctuations, with operating cash flows declining in 2024 to zero. The company has been successful in maintaining positive free cash flow in prior years, though this was zero in the latest available period. The operating cash flow to net income ratio was favorable in previous years, showcasing efficient cash generation relative to earnings.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 19.65B | 147.40B | 169.99B | 111.48B | 64.13B | Gross Profit |
| -112.67B | 11.15B | 18.43B | 7.77B | 5.03B | EBIT |
| 0.00 | 8.02B | 12.74B | 3.83B | -287.00M | EBITDA |
| 5.99B | 12.37B | 16.91B | 3.95B | -3.05B | Net Income Common Stockholders |
| 2.12B | 7.00B | 11.02B | 1.31B | -3.71B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.74B | 3.32B | 6.13B | 3.15B | 2.51B | Total Assets |
| 72.58B | 75.50B | 76.44B | 55.59B | 54.72B | Total Debt |
| 20.06B | 19.36B | 17.19B | 14.45B | 15.89B | Net Debt |
| 18.32B | 16.04B | 11.06B | 11.30B | 13.38B | Total Liabilities |
| 44.12B | 43.85B | 42.34B | 33.96B | 33.20B | Stockholders Equity |
| 27.41B | 30.58B | 29.49B | 19.17B | 18.98B |
| Cash Flow | Free Cash Flow | |||
| 2.33B | 4.61B | 8.62B | 4.16B | -809.00M | Operating Cash Flow |
| 4.19B | 7.03B | 10.81B | 6.02B | 2.11B | Investing Cash Flow |
| -2.46B | -5.86B | -1.49B | -1.87B | -3.08B | Financing Cash Flow |
| -3.31B | -4.03B | -6.39B | -3.47B | 1.79B |
Phillips 66 Technical Analysis
Negative
122.29
Price Trends
119.46
Positive
123.36
Negative
128.42
Negative
Market Momentum
1.50
Positive
46.39
Neutral
32.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSX, the sentiment is Negative. The current price of 122.29 is below the 20-day moving average (MA) of 125.45, above the 50-day MA of 119.46, and below the 200-day MA of 128.42, indicating a neutral trend. The MACD of 1.50 indicates Positive momentum. The RSI at 46.39 is Neutral, neither overbought nor oversold. The STOCH value of 32.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSX.
Phillips 66 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $49.86B | 24.49 | 7.72% | 3.68% | -2.81% | -68.00% | |
67 Neutral | $44.58B | 14.15 | 13.40% | 2.38% | -6.70% | -57.84% | |
63 Neutral | $40.19B | 14.87 | 11.30% | 3.38% | -10.35% | -65.68% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% | |
55 Neutral | $1.81B | 258.33 | 1.00% | 11.29% | -17.69% | -99.09% | |
47 Neutral | $1.02B | ― | -97.43% | 6.38% | -28.68% | -4373.94% | |
46 Neutral | $2.47B | ― | -9.63% | 5.21% | -13.59% | -127.47% |
* Energy Sector Average
Performance Comparison
PSX
Phillips 66
122.29
-19.57
-13.80%
CVI
CVR Energy
17.98
-13.07
-42.09%
DK
Delek US Holdings
15.67
-8.35
-34.76%
MPC
Marathon Petroleum
142.62
-28.91
-16.85%
VLO
Valero Energy
127.61
-12.67
-9.03%
PBF
PBF Energy
20.56
-25.81
-55.66%
Phillips 66 Earnings Call Summary
Earnings Call Date: Jan 31, 2025 | % Change Since: 2.11% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant achievements in shareholder distribution, clean product yields, and renewable fuels. However, challenges in earnings, chemicals, and refining segments, alongside an increased debt level, present some concerns.Highlights
Strong Shareholder Distribution
Achieved shareholder distribution target with $13.6 billion distributed through share repurchases and dividends since July 2022.
Record Clean Product Yields
Set record clean product yields both for the quarter and full year, while reducing costs by a dollar per barrel.
DCP Midstream Acquisition Success
Exceeded $400 million synergy target by capturing $500 million of run rate synergies, increasing Midstream's mid-cycle adjusted EBITDA by $1.5 billion.
Asset Divestitures
Announced $3.5 billion in asset divestitures, exceeding the $3 billion target for non-core asset dispositions.
Renewable Fuels Segment Improvement
Renewable fuels results increased due to higher margins at the Rodeo complex and stronger international results.
Lowlights
Overall Earnings Loss
Reported earnings were $8 million or $0.01 per share, with an adjusted loss of $61 million or $0.15 per share.
Chemical Segment Challenges
Chemicals results decreased mainly due to lower polyethylene chain margins and higher costs related to turnarounds and maintenance.
Refining Segment Challenges
Lower refining results primarily due to weaker crack spreads and a full quarter of accelerated depreciation for the Los Angeles refinery.
Increased Debt Level
Net debt to capital ratio ended higher than target level, though the company maintains a strong balance sheet.
Company Guidance
During the Phillips 66 Fourth Quarter 2024 Earnings Conference Call, the company provided guidance on several key metrics. The company achieved its shareholder distribution target with $13.6 billion distributed through share repurchases and dividends since July 2022. In refining, they reported a second consecutive year of above industry average crude utilization and set record clean product yields while reducing costs by $1 per barrel. The DCP midstream acquisition exceeded its $400 million synergy target, capturing $500 million in run rate synergies, thus increasing Midstream's mid-cycle adjusted EBITDA by $1.5 billion. The company also surpassed its $1.4 billion run rate business transformation savings goal, achieving $1.5 billion in savings. Phillips 66 committed to $3 billion of non-core asset dispositions and has announced $3.5 billion in asset divestitures. Looking ahead to 2025-2027, the company aims to return over 50% of operating cash flow to shareholders and targets a $5.50 per barrel adjusted controllable cost excluding turnarounds. They plan to grow Midstream and Chemicals mid-cycle adjusted EBITDA by an additional $1 billion by 2027, with non-refining mid-cycle EBITDA expected to reach $10 billion by 2027. Additionally, they intend to reduce total debt to $17 billion, contingent on the margin environment and planned dispositions.Phillips 66 Corporate Events
Executive/Board ChangesShareholder Meetings
Phillips 66 Announces Board Member Departures in 2025
Neutral
Feb 18, 2025
On February 12, 2025, Phillips 66 announced that board members Gary K. Adams and Denise L. Ramos decided not to stand for reelection at the company’s 2025 Annual Meeting of Shareholders, as part of the board’s ongoing refreshment activities. Their departure will result in the reduction of the board size from 14 to 12 directors, effective immediately after the Annual Meeting, indicating a strategic shift but not due to any disagreements with company policies.
M&A TransactionsBusiness Operations and Strategy
Phillips 66 Expands with $2.2 Billion EPIC Acquisition
Positive
Jan 7, 2025
Phillips 66 announced its agreement to acquire EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP for $2.2 billion, a move expected to enhance its position as a leading integrated downstream energy provider. The acquisition, which includes long-haul natural gas liquids pipelines and fractionation facilities, aims to optimize the company’s Permian NGL value chain and is anticipated to be immediately accretive to earnings, subject to regulatory approval and customary closing conditions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.