Phillips 66 (NYSE:PSX) Stock Falls 2.9% - Should You Sell?

Key Points

• Phillips 66 shares fell 2.9% to about $274.76 on elevated trading volume, despite the company recently exceeding earnings and revenue expectations.
• Analyst sentiment is mixed: Morgan Stanley raised its price target to $290 with an “overweight” rating, while Freedom Broker upgraded the stock only to “hold” with a $258 target. Overall, analysts maintain a “Moderate Buy” rating with an average target of $269.82.
• Phillips 66 increased its quarterly dividend to $1.33 per share and has a $10 billion share-repurchase authorization, while also pursuing renewable-fuel growth through a used-cooking-oil supply agreement.

Phillips 66 (NYSE:PSX - Get Free Report) dropped 2.9% during mid-day trading on Monday. The stock traded as low as $274.38 and last traded at $274.7560. 3,874,879 shares changed hands during mid-day trading, an increase of 36% from the average daily volume of 2,842,065 shares. The stock had previously closed at $282.83.

Phillips 66 News Summary

Here are the key news stories impacting Phillips 66 this week:

• Positive Sentiment: Phillips 66 signed a long-term agreement with Restaurant Technologies to source traceable used cooking oil from U.S. restaurants for sustainable aviation fuel and other renewable fuels produced in California. The deal could strengthen PSX’s feedstock supply, support lower-carbon fuel production and expand its renewable fuels platform. Phillips 66 and Restaurant Technologies are Converting Used Cooking Oil into Sustainable Aviation Fuel
• Positive Sentiment: Morgan Stanley raised its PSX price target from $284 to $290 and maintained an “overweight” rating, indicating continued confidence in the refining company’s outlook. Morgan Stanley PSX Rating
• Positive Sentiment: Technical coverage highlighted a bullish “golden cross” signal, with shares moving above their 20-day moving average. This suggests improving short-term momentum, although technical signals do not guarantee further gains. Phillips 66 Golden Cross Signal
• Neutral Sentiment: PSX was included among stocks favored by a DuPont-analysis screen, which emphasizes profitability, asset efficiency and leverage. This is supportive of the company’s fundamentals but is not a new earnings or business announcement.
• Neutral Sentiment: Articles are also highlighting Phillips 66 as a stock to watch if oil prices remain above $100 and physical energy markets stay tight. Higher energy prices may support the sector, but refining margins and input costs remain important variables.
• Negative Sentiment: Freedom Broker upgraded Phillips 66 only from “sell” to “hold” and set a $258 price target, below the stock’s recent trading level. The sharply lower target contrasts with Morgan Stanley’s bullish view and may be weighing on investor sentiment. Freedom Broker Upgrades Phillips 66

Wall Street Analysts Forecast Growth

Several research analysts recently weighed in on PSX shares. Citigroup boosted their price target on shares of Phillips 66 from $217.00 to $297.00 and gave the stock a "neutral" rating in a report on Tuesday, October 13th. Freedom Broker upgraded shares of Phillips 66 from a "sell" rating to a "hold" rating and increased their price objective for the company from $173.00 to $258.00 in a research note on Friday. Wall Street Zen raised shares of Phillips 66 from a "buy" rating to a "strong-buy" rating in a research report on Sunday, July 26th. Weiss Ratings raised shares of Phillips 66 from a "buy (b)" rating to a "buy (b+)" rating in a research report on Thursday, October 8th. Finally, Morgan Stanley boosted their target price on Phillips 66 from $284.00 to $290.00 and gave the stock an "overweight" rating in a research note on Monday. Two analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and eight have given a Hold rating to the company's stock. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average price target of $269.82.

Phillips 66 Trading Down 2.9%

The stock has a market capitalization of $107.17 billion, a PE ratio of 8.78, a price-to-earnings-growth ratio of 0.15 and a beta of 0.69. The firm has a 50-day moving average price of $266.19 and a 200-day moving average price of $198.51. The company has a current ratio of 1.34, a quick ratio of 1.04 and a debt-to-equity ratio of 0.49.

Phillips 66 (NYSE:PSX - Get Free Report) last released its earnings results on Wednesday, October 28th. The oil and gas company reported $14.08 EPS for the quarter, topping analysts' consensus estimates of $11.73 by $2.35. The company had revenue of $50.54 billion for the quarter, compared to analysts' expectations of $44.91 billion. Phillips 66 had a return on equity of 33.12% and a net margin of 7.27%. During the same period in the previous year, the business posted $2.52 EPS. As a group, equities analysts forecast that Phillips 66 will post 33.11 EPS for the current fiscal year.

Phillips 66 Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 1st. Investors of record on Tuesday, November 17th will be issued a dividend of $1.33 per share. This represents a $5.32 dividend on an annualized basis and a yield of 1.9%. This is a boost from Phillips 66's previous quarterly dividend of $1.27. The ex-dividend date is Tuesday, November 17th. Phillips 66's dividend payout ratio is 16.22%.

Phillips 66 announced that its board has initiated a share repurchase program on Friday, July 31st that authorizes the company to repurchase $10 billion in outstanding shares. This buyback authorization authorizes the oil and gas company to repurchase up to 11.8% of its shares through open market purchases. Stock buyback programs are generally an indication that the company's leadership believes its stock is undervalued.

Insider Activity

In other Phillips 66 news, EVP Richard Harbison sold 52,100 shares of the business's stock in a transaction dated Wednesday, August 12th. The shares were sold at an average price of $223.76, for a total value of $11,657,896.00. Following the transaction, the executive vice president directly owned 39,094 shares in the company, valued at $8,747,673.44. The trade was a 57.13% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Brian Mandell sold 23,400 shares of the stock in a transaction that occurred on Wednesday, September 16th. The shares were sold at an average price of $265.06, for a total transaction of $6,202,404.00. Following the transaction, the executive vice president directly owned 61,595 shares of the company's stock, valued at $16,326,370.70. This represents a 27.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders sold 108,800 shares of company stock worth $25,016,566. Insiders own 0.40% of the company's stock.

Hedge Funds Weigh In On Phillips 66

Institutional investors and hedge funds have recently bought and sold shares of the company. Covestor Ltd lifted its position in shares of Phillips 66 by 13.8% during the 3rd quarter. Covestor Ltd now owns 363 shares of the oil and gas company's stock valued at $93,000 after buying an additional 44 shares during the last quarter. Pointe Capital Management LLC increased its holdings in Phillips 66 by 4.3% in the 2nd quarter. Pointe Capital Management LLC now owns 1,261 shares of the oil and gas company's stock worth $213,000 after acquiring an additional 52 shares during the last quarter. Community Financial Services Group LLC increased its holdings in Phillips 66 by 9.2% in the 3rd quarter. Community Financial Services Group LLC now owns 615 shares of the oil and gas company's stock worth $163,000 after acquiring an additional 52 shares during the last quarter. AMI Investment Management Inc. increased its holdings in Phillips 66 by 3.1% in the 3rd quarter. AMI Investment Management Inc. now owns 1,752 shares of the oil and gas company's stock worth $447,000 after acquiring an additional 53 shares during the last quarter. Finally, Key Client Fiduciary Advisors LLC raised its stake in Phillips 66 by 3.5% in the 2nd quarter. Key Client Fiduciary Advisors LLC now owns 1,624 shares of the oil and gas company's stock valued at $275,000 after acquiring an additional 55 shares during the period. 76.93% of the stock is owned by institutional investors.

Phillips 66 Company Profile

Phillips 66 NYSE: PSX is an energy manufacturing and logistics company headquartered in Houston, Texas. The company was established in 2012 following the separation of ConocoPhillips' downstream and midstream businesses.

Phillips 66 operates across midstream, chemicals, refining and marketing. Its midstream activities include gathering, processing, transporting and storing crude oil, natural gas and natural gas liquids. Through its refining operations, the company converts crude oil and other feedstocks into gasoline, diesel, jet fuel, lubricants and other refined petroleum products.

The company markets fuel and related products under the Phillips 66, 76 and Conoco brands, serving retail, commercial, aviation and industrial customers.

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