Phillips 66 (PSX) AI Stock Analysis

• Market Cap: $43.70B
• Dividend Yield: 4.29%
• Average Volume (3M): 3.71M
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.79
• Revenue Growth: -2.81%
• EPS Growth: -68.00%
• Country: US
• Employees: 13,200
• Sector: Energy
• Sector Strength: 74
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 4.93
• Shares Outstanding: 407,698,330
• 10 Day Avg. Volume: 2,543,064
• 30 Day Avg. Volume: 3,714,901
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.36
• Price to Cash Flow (P/CF): 10.70
• P/FCF Ratio: 18.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $138.23
• Price Target Upside: 39.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

Phillips 66 demonstrates strong financial performance with consistent revenue growth and shareholder distributions. The technical indicators are neutral to bearish, and the stock's valuation is reasonable with a good dividend yield. Recent corporate actions like the EPIC Y-Grade acquisition support long-term growth, despite some challenges in earnings and increased debt levels.

Positive Factors

Cost Efficiency

Phillips 66 ranks among the lowest operating cost refineries, which is considered the company's biggest strength.

Renewable Energy Initiatives

The startup of the Rodeo Renewed project and improvement in chemical demand from China are expected to drive performance, with the refinery being converted into one of the world’s largest renewable fuels facilities.

Shareholder Returns

Shareholder returns are supported by a significantly higher dividend payout ratio and an additional share repurchase authorization.

Negative Factors

Chemical Business Challenges

The high exposure of Phillips 66 to the chemical business in the US and Europe presents challenges, contributing to the HOLD rating.

Communication and M&A Concerns

The market is not fully valuing PSX's total earnings potential while communication around M&A has been a headwind.

Earnings Volatility

Much of the debate on Phillips 66 lies on the value of refining, where earnings volatility is high.

Phillips 66 Business Overview & Revenue Model

Company Description

Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined petroleum products to market; provides terminaling and storage services for crude oil and refined petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, aviation, and renewable fuels at 12 refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, including gasolines, distillates, and aviation fuels primarily in the United States and Europe. This segment also manufactures and markets specialty products, such as base oils and lubricants. The company was founded in 1875 and is headquartered in Houston, Texas.

How the Company Makes Money

Phillips 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 generally strong financial position with consistent revenue growth and improving profitability metrics over the years. While the balance sheet demonstrates stability, 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. Overall, the company is well-positioned in the fossil fuels industry but should be cautious about cash flow sustainability.

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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 98.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 98.81 is below the 20-day moving average (MA) of 123.33, below the 50-day MA of 123.63, and below the 200-day MA of 126.87, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 48.50 is Neutral, neither overbought nor oversold. The STOCH value of 26.46 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSX	70 Outperform	$43.70B	21.46	7.27%	4.29%	-2.81%	-68.00%
MPC	67 Neutral	$40.06B	12.74	16.33%	2.70%	-6.70%	-57.85%
VLO	63 Neutral	$35.94B	13.32	10.86%	3.80%	-10.37%	-65.69%
Sector *	58 Neutral	$9.12B	5.24	-7.59%	7.51%	0.53%	-65.25%
CVI	55 Neutral	$1.80B	256.75	0.90%	11.19%	-17.69%	-99.09%
DK	47 Neutral	$798.69M	―	-108.21%	7.86%	-28.68%	-4373.94%
PBF	46 Neutral	$1.93B	―	-8.87%	6.29%	-13.59%	-127.47%

Phillips 66 Corporate Events

Phillips 66 Completes $2.2 Billion Acquisition of EPIC Y-Grade

On April 1, 2025, Phillips 66 completed the acquisition of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP for approximately $2.2 billion, enhancing its position as a leading integrated downstream energy provider. This acquisition, which includes natural gas liquids pipelines and fractionation facilities, strengthens Phillips 66’s ability to deliver energy products efficiently and is expected to create long-term value for shareholders. The expansion of the NGL pipeline capacity is planned to be completed by the fourth quarter of 2026, further integrating Permian production with Gulf Coast markets.

Phillips 66 Announces Board Member Departures in 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.

Phillips 66 Expands with $2.2 Billion EPIC Acquisition

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.