Update shared on20 Sep 2025
Fair value Increased 2.39%Consensus price targets for Phillips 66 have increased to $139.84, reflecting analyst confidence in persistent refining margin strength, strong recent results, and upside from chemicals, while near-term risks from potential activist exits and sector pullbacks are noted.
Analyst Commentary
- Bullish analysts cite persistent strength in refining margins, with global product markets remaining relatively tight and distillate tightness expected to continue into winter, supporting a higher margin risk well into 2026.
- Positive Q2 earnings surprises and strong early Q3 refining margin capture, especially outperforming expectations, are driving upward price target revisions for Phillips 66.
- Refining division performance is anticipated to improve into 2026, and possible chemicals margin rebound adds upside potential, underpinned by the company's stable balance sheet and diversified operations.
- Cautious or bearish analysts flag the risk of activist Elliott's potential exit following a proxy battle, which could create near-term selling pressure and raise the bar for outperformance in upcoming quarters.
- Some bearish adjustments reflect concerns about overextended sector rallies and the potential for modest pullbacks, but these are tempered by expectations of tightening supply/demand balances and positive earnings revisions in the later half of the year and into 2026-2027.
What's in the News
- Phillips 66 is exploring long-term purchases of U.S. liquefied natural gas (LNG) and has begun staffing for this initiative in Houston, though talks are still at an early stage (Bloomberg, 2025-09-10).
- The company is set to permanently close its 139,000 barrel-per-day Los Angeles-area refinery starting in September, as previously announced, with operations winding down as soon as next week (Reuters, 2025-08-28).
- Phillips 66 completed the repurchase of 3.54 million shares for $395 million in Q2 2025, bringing the total buyback since October 2019 to about 89.95 million shares (20.23% of shares outstanding) for $10.16 billion.
- The stock was added to several major indices, including the Russell 1000 Growth, Russell 3000 Growth, Russell Midcap Growth, Russell Midcap Value, and Russell 3000E Growth benchmarks in June 2025.
- Phillips 66 was simultaneously dropped from value-oriented benchmarks such as the Russell Top 200 Value Index and Russell Top 200 Index, reflecting index rebalancing in June 2025.
Valuation Changes
Summary of Valuation Changes for Phillips 66
- The Consensus Analyst Price Target has risen slightly from $136.58 to $139.84.
- The Consensus Revenue Growth forecasts for Phillips 66 has risen slightly from -3.4% per annum to -3.2% per annum.
- The Future P/E for Phillips 66 has risen slightly from 12.37x to 12.90x.
Disclaimer
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