How Phillips 66’s Refinery Acquisitions and Record Utilization Could Shape PSX’s Investment Outlook

• Phillips 66 recently reported third-quarter 2025 results, showing a decline in revenue and net income compared to the prior year, while also announcing full ownership acquisitions of the Wood River and Borger refineries and continued returns to shareholders.
• Despite the earnings decrease, the company achieved its highest refining utilization rate since 2018 and completed acquisitions expected to improve operational synergies and shareholder value.
• We’ll examine how Phillips 66’s record refining utilization and refinery buyouts may influence its long-term investment outlook.

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Phillips 66 Investment Narrative Recap

To remain a Phillips 66 shareholder, you have to believe in the company’s ability to enhance long-term value through operational improvement and disciplined capital allocation, despite short-term earnings volatility. The latest results, with revenue and net income down year-over-year, do not materially alter the near-term catalyst of improved refining efficiency, but they reinforce the key risk: earnings pressure from tougher refining and chemicals markets, as well as one-off items affecting profitability.

The recent completion of full ownership in the Wood River and Borger refineries stands out, as it is directly tied to Phillips 66’s ambitions to lift operational performance and synergies. This announcement aligns with the catalyst of better refining margins through efficiency gains, even as the company contends with headwinds in commodity markets and the impacts of ongoing turnaround programs.

However, it’s important for investors to also consider that, in contrast to positive operating metrics, Phillips 66’s near-term earnings remain susceptible to...

Read the full narrative on Phillips 66 (it's free!)

Phillips 66's outlook anticipates $120.0 billion in revenue and $5.2 billion in earnings by 2028. This scenario assumes a revenue decline of 3.4% per year and a $3.5 billion increase in earnings from the current $1.7 billion.

Uncover how Phillips 66's forecasts yield a $146.10 fair value, a 7% upside to its current price.

Exploring Other Perspectives

Community members at Simply Wall St provided 7 fair value estimates for Phillips 66, ranging from US$80.65 to US$357.09 per share. While these perspectives vary widely, the recent earnings shortfall and margin compression remind us that even operational improvements may not shield results from broader industry pressures.

Explore 7 other fair value estimates on Phillips 66 - why the stock might be worth over 2x more than the current price!

Build Your Own Phillips 66 Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Phillips 66 research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Phillips 66 research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Phillips 66's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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