TD Cowen Upgrades Phillips 66 Shares to Outperform Rating
June 9, 2023
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TD Cowen recently upgraded Phillips 66 ($NYSE:PSX) shares from a market perform rating to an outperform rating, indicating that the stock is likely to outperform its peers. Phillips 66 is an American multinational energy company headquartered in Houston, Texas. It is primarily involved in marketing and manufacturing of fuels, lubricants, and petrochemical products. The company is also engaged in midstream pipeline operations, refining of crude oil, and production of petrochemicals. The upgraded rating for Phillips 66 shares is a result of the company’s strong portfolio of midstream operations, which include pipelines, storage terminals, and other assets.
In addition, it has well-positioned refining assets with cost advantages due to its low-cost feedstocks and access to global markets. TD Cowen believes that the company is well-positioned for growth and can successfully navigate the current market volatility.
Share Price
Following the announcement, PHILLIPS 66 stock opened at $98.1 but closed the day at $96.0, down 1.0% from its previous closing price of 97.0. Despite the downgrade, Phillips 66 remains a strong buy for many investors due to its attractive dividend yield and its long-term growth prospects. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Phillips 66. More…
| Total Revenues | Net Income | Net Margin |
| 168.21k | 12.39k | 6.2% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Phillips 66. More…
| Operations | Investing | Financing |
| 10.88k | -1.32k | -5.99k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Phillips 66. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 76.44k | 42.34k | 63.99 |
Key Ratios Snapshot
Some of the financial key ratios for Phillips 66 are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 17.0% | 46.5% | 10.2% |
| FCF Margin | ROE | ROA |
| 5.2% | 36.4% | 14.0% |
Analysis
GoodWhale has conducted an analysis of PHILLIPS 66‘s wellbeing and based on our Risk Rating, it is a medium risk investment in terms of financial and business aspects. We have detected two risk warnings in their income sheet and balance sheet, and these can be accessed by becoming a registered user on GoodWhale. As a registered user, you will be able to understand the specific risks associated with investing in PHILLIPS 66, and make an informed decision as to whether or not the investment is right for you. More…
Peers
Phillips 66 is an American multinational energy company headquartered in Houston, Texas. It was founded in 1917 and is engaged in the refining, marketing, and transportation of petroleum products, chemicals, and other petrochemical products. The company has a market capitalization of $46.61 billion as of February 2021. Phillips 66 is one of the largest refiners in the United States with a refining capacity of 2.2 million barrels per day. The company operates in three segments: Refining, Midstream, and Chemicals. The Refining segment engages in the refining of crude oil and other feedstocks into transportation fuels, such as gasoline, diesel fuel, aviation fuel, and heavy fuel oils, as well as other refined products, such as petrochemicals and lubricants. The Midstream segment provides transportation, storage, and marketing services for crude oil, natural gas liquids (NGLs), and natural gas. The Chemicals segment manufactures and markets chemicals and plastics.
– Targa Resources Corp ($NYSE:TRGP)
Targa Resources Corp is an American energy company that engages in the gathering, processing, and transportation of natural gas and natural gas liquids. The company has a market cap of 15.21B as of 2022 and a Return on Equity of 45.39%. Targa Resources is headquartered in Houston, Texas.
– PT Surya Esa Perkasa Tbk ($IDX:ESSA)
Surya Esa Perkasa Tbk is one of the largest publicly traded companies in Indonesia. It has a market capitalization of 15.03 trillion as of 2022 and a return on equity of 49.72%. The company is engaged in the production and distribution of cement, asphalt, and other building materials. It also has a significant presence in the mining, power generation, and construction industries.
– ONEOK Inc ($NYSE:OKE)
ONEOK, Inc. is a diversified energy midstream service provider and owns one of the largest natural gas gathering and processing systems in the U.S. The company operates in three segments: Natural Gas Gathering and Processing, Natural Gas Liquids (NGL) Transportation, and NGLs Sales and Services.
ONEOK’s market cap as of 2022 is 24.88B. The company has a ROE of 28.78%.
Summary
Investment analysis of Phillips 66 is favorable following an upgrade of its market perform rating to outperform by TD Cowen. Analysts believe the company offers upside potential, with a strong balance sheet and solid operating performance. Phillips 66 is well-positioned for growth and is expected to benefit from its diversified portfolio of assets across refining, marketing, midstream, chemicals, and specialties businesses.
The company has a history of strong cash flow generation and has been executing on its strategy of growth and value expansion. With attractive valuation levels and an outlook for continuing improvement in fundamentals, Phillips 66 is an attractive investment opportunity.
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