In a report released yesterday, Roger Read from Wells Fargo maintained a Buy rating on Phillips 66 (PSX – Research Report), with a price target of $151.00.
Roger Read has given his Buy rating to Phillips 66 due to a combination of factors influencing the company’s performance and potential. The decision is anchored on the improved earnings per share (EPS) estimate for the fourth quarter of 2023, which has been adjusted from $1.96 to $2.32. This uptick is attributed to better-than-expected refining and marketing and specialties (M&S) performances, alongside a beneficial reversal of inventory impacts that were felt in the previous quarter. Moreover, the company has been engaging in share buybacks, leading to a lower share count, which positively impacts EPS.
Additional considerations informing the Buy rating include the assumption of modest enhancements to crack spread assumptions and a slight uptick in M&S margins based on retail performance. Despite forecasting a decrease in quarter-over-quarter refining margins due to lower gasoline and diesel cracks, Read expects these to be partially offset by wider differentials and the earlier mentioned inventory reversal. Furthermore, the projected utilization rates are anticipated to surpass industry averages, underpinning the company’s robust operational stance. While maintaining the overweight rating and a price target of $151, Read’s analysis suggests that even with these adjustments, the EPS estimates remain conservative relative to wider market expectations.
In another report released on January 8, Piper Sandler also maintained a Buy rating on the stock with a $149.00 price target.
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Phillips 66 (PSX) Company Description:
Founded in 2012, Phillips 66 is a Texas-based multinational energy company, which is engaged in the processing, transportation, storage, and marketing of fuels and other related products. The company operates through the following segments: Midstream, Chemicals, Refining and Marketing & Specialties.
Read More on PSX:
- Phillips 66 price target raised to $149 from $134 at Piper Sandler
- Phillips 66 price target raised by $11 at Morgan Stanley, here’s why
- Phillips 66 price target raised by $8 at Wells Fargo, here’s why
- Phillips 66 reinstated with an Equal Weight at Barclays
- Phillips 66 announces 2024 capital budget of $2.2B
