Analyst Lloyd Byrne of Jefferies maintained a Hold rating on Phillips 66 (PSX – Research Report), boosting the price target to $162.00.
Lloyd Byrne has given his Hold rating due to a combination of factors surrounding Phillips 66’s recent performance and future prospects. The first quarter earnings for Phillips 66 were somewhat disappointing, with EBITDA coming in around 6% and 7% lower than consensus and Jefferies’ own forecasts, respectively. This was primarily due to maintenance issues within the Refining sector and adverse weather conditions affecting the Midstream operations. Although these setbacks were mitigated by the company’s substantial return of approximately $1.6 billion to shareholders through buybacks and dividends, and progress in asset sales, these factors were not enough to warrant a more optimistic rating.
Adding to the complexity of the situation, there is anticipation for further details on potential divestments in the German and Austrian retail marketing sectors, which could impact the company’s value. Furthermore, Phillips 66 has achieved significant cost and sustaining capital savings, reaching $1.24 billion in run-rate savings with a target of $1.4 billion by the end of the year. Despite these cost-saving measures, the underperformance in the Refining EBITDA, which was about 22% and 24% below the consensus and Jefferies’ forecasts, respectively, and the challenges within the Midstream and Refining sectors have led Byrne to maintain a cautious stance on the stock for now.
Byrne covers the Energy sector, focusing on stocks such as EQT, Exxon Mobil, and Baker Hughes Company. According to TipRanks, Byrne has an average return of 28.7% and a 65.80% success rate on recommended stocks.
In another report released on April 18, Barclays also maintained a Hold rating on the stock with a $155.00 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.
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