Phillips 66 (NYSE:PSX) Stock Falls 4.6% - What's Next?

Key Points

• Phillips 66 shares fell 4.6% to $259.39, with trading volume 92% above its daily average; the article cites no specific catalyst for the drop.
• The company reported quarterly earnings of $14.08 per share, beating estimates of $11.73, and revenue of $50.54 billion versus $44.91 billion expected. It also raised its quarterly dividend to $1.33 per share from $1.27.
• Analyst sentiment is generally positive: MarketBeat’s consensus is “Moderate Buy” with a $270.12 price target. Phillips 66 also secured a long-term used-cooking-oil supply deal to support renewable fuels production.

Phillips 66 (NYSE:PSX - Get Free Report) shares dropped 4.6% during trading on Wednesday. The company traded as low as $251.13 and last traded at $259.3850. Approximately 5,473,391 shares changed hands during mid-day trading, an increase of 92% from the average daily volume of 2,846,241 shares. The stock had previously closed at $271.94.

Key Stories Impacting Phillips 66

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

• Positive Sentiment: Phillips 66 agreed to a long-term supply arrangement with Restaurant Technologies for used cooking oil, a domestic feedstock for sustainable aviation fuel and renewable diesel at its Rodeo Renewable Energy Complex. The deal supports feedstock access and the company’s lower-carbon fuels business. Article: Phillips 66 Secures Long Term Used Cooking Oil Supply For Renewable Fuels
• Positive Sentiment: Morgan Stanley issued a Buy rating, signaling an analyst view that the shares could appreciate. Article: Morgan Stanley Issues a Buy Rating on Phillips 66
• Neutral Sentiment: Citigroup raised its price target to $302 from $297 but maintained a Neutral rating, indicating a higher valuation view without a change in its overall recommendation. Article: Citigroup Adjusts Price Target on Phillips 66
• Negative Sentiment: One report described a steep one-session drop in PSX shares. The article highlights the decline but does not establish a specific reason for it, so the move may reflect selling pressure rather than a clearly reported company development. Article: Phillips 66 Drops in One Session

Analyst Upgrades and Downgrades

PSX has been the subject of several recent research reports. Wells Fargo & Company lifted their target price on shares of Phillips 66 from $345.00 to $346.00 and gave the company an "overweight" rating in a report on Thursday, October 29th. Wall Street Zen raised shares of Phillips 66 from a "buy" rating to a "strong-buy" rating in a report on Sunday, July 26th. Freedom Broker upgraded shares of Phillips 66 from a "sell" rating to a "hold" rating and raised their price target for the company from $173.00 to $258.00 in a research report on Friday, October 30th. UBS Group raised their price target on shares of Phillips 66 from $235.00 to $300.00 and gave the company a "buy" rating in a research report on Tuesday, September 8th. Finally, Weiss Ratings raised shares of Phillips 66 from a "buy (b)" rating to a "buy (b+)" rating in a report on Thursday, October 8th. Two investment analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and eight have given a Hold rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $270.12.

Phillips 66 Stock Performance

The company has a debt-to-equity ratio of 0.49, a quick ratio of 1.04 and a current ratio of 1.34. The firm's 50-day moving average price is $267.41 and its two-hundred day moving average price is $199.84. The stock has a market cap of $101.18 billion, a price-to-earnings ratio of 8.28, a PEG ratio of 0.15 and a beta of 0.69.

Phillips 66 (NYSE:PSX - Get Free Report) last posted its earnings results on Wednesday, October 28th. The oil and gas company reported $14.08 EPS for the quarter, beating analysts' consensus estimates of $11.73 by $2.35. Phillips 66 had a net margin of 7.27% and a return on equity of 33.12%. The company had revenue of $50.54 billion for the quarter, compared to analysts' expectations of $44.91 billion. During the same quarter in the prior year, the company posted $2.52 earnings per share. On average, analysts expect that Phillips 66 will post 33.22 EPS for the current fiscal year.

Phillips 66 Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 1st. Stockholders of record on Tuesday, November 17th will be given a dividend of $1.33 per share. This is an increase from Phillips 66's previous quarterly dividend of $1.27. The ex-dividend date of this dividend is Tuesday, November 17th. This represents a $5.32 annualized dividend and a dividend yield of 2.1%. Phillips 66's dividend payout ratio is presently 16.22%.

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

Insider Activity at Phillips 66

In related news, EVP Richard Harbison sold 52,100 shares of Phillips 66 stock in a transaction on Wednesday, August 12th. The shares were sold at an average price of $223.76, for a total transaction of $11,657,896.00. Following the sale, the executive vice president directly owned 39,094 shares in the company, valued at $8,747,673.44. This trade represents a 57.13% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Brian Mandell sold 30,000 shares of the company's stock in a transaction dated Tuesday, August 11th. The shares were sold at an average price of $215.00, for a total value of $6,450,000.00. Following the completion of the sale, the executive vice president directly owned 61,595 shares of the company's stock, valued at approximately $13,242,925. This trade represents a 32.75% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 108,800 shares of company stock worth $25,016,566 over the last quarter. 0.40% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Phillips 66

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. Allspring Global Investments Holdings LLC raised its holdings in Phillips 66 by 24.4% in the 3rd quarter. Allspring Global Investments Holdings LLC now owns 292,167 shares of the oil and gas company's stock worth $77,199,000 after acquiring an additional 57,262 shares during the last quarter. Leelyn Smith LLC purchased a new position in shares of Phillips 66 in the 3rd quarter worth $211,000. Parallel Advisors LLC grew its holdings in shares of Phillips 66 by 4.9% in the third quarter. Parallel Advisors LLC now owns 11,986 shares of the oil and gas company's stock worth $3,060,000 after acquiring an additional 564 shares during the period. International Assets Investment Management LLC lifted its holdings in Phillips 66 by 35.7% in the third quarter. International Assets Investment Management LLC now owns 24,747 shares of the oil and gas company's stock valued at $6,318,000 after acquiring an additional 6,517 shares during the period. Finally, Chicago Partners Investment Group LLC grew its stake in shares of Phillips 66 by 8.1% during the 3rd quarter. Chicago Partners Investment Group LLC now owns 21,572 shares of the oil and gas company's stock valued at $6,109,000 after purchasing an additional 1,622 shares during the period. Institutional investors and hedge funds own 76.93% of the company's stock.

About Phillips 66

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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