How the Western Gateway Pipeline Partnership Could Influence Phillips 66 (PSX) Growth and Earnings Stability

• On October 20, 2025, Phillips 66 and Kinder Morgan announced the commencement of a binding open season for the Western Gateway Pipeline, a partnership aimed at expanding refined product transportation from Texas to Arizona, California, and Nevada via a new and reconfigured pipeline system.
• This infrastructure project is set to enhance regional supply chain resilience by enabling Midwest refinery supply to reach key Southwestern and West Coast markets, potentially increasing operational flexibility for both companies.
• We’ll examine how the Western Gateway Pipeline partnership may influence Phillips 66’s growth outlook and midstream earnings stability.

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Phillips 66 Investment Narrative Recap

To be a Phillips 66 shareholder today, you need to believe in the company's ability to generate stable earnings and cash flow, especially from its Midstream business and ongoing infrastructure investments. The recent announcement regarding upcoming board retirements should not materially affect the company’s most important short-term catalyst: stable midstream earnings from the Western Gateway Pipeline project. However, it is still important to watch for any board or governance changes that could introduce risk to these plans.

Of the recent developments, the Western Gateway Pipeline partnership with Kinder Morgan is the most relevant for the company’s earnings stability, as it targets midstream growth and improved connectivity from Texas to California, Arizona, and Nevada. This aligns directly with current analyst catalysts, as Phillips 66 seeks to expand its fee-based earnings, enhance operational flexibility, and offset challenges in refining through midstream growth.

Yet, the short-term risk of regulatory or operational disruptions in Midstream that could impact cash flow and earnings stability remains something investors should not overlook, especially as...

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

Phillips 66's narrative projects $120.0 billion in revenue and $5.2 billion in earnings by 2028. This requires a 3.4% annual decline in revenue and a $3.5 billion increase in earnings from the current $1.7 billion level.

Uncover how Phillips 66's forecasts yield a $145.20 fair value, a 8% upside to its current price.

Exploring Other Perspectives

Seven viewpoints from the Simply Wall St Community place Phillips 66’s fair value estimates between US$80.65 and US$280.84 per share. While opinions stretch widely, stable midstream earnings remain a key factor for those considering the company’s longer-term performance.

Explore 7 other fair value estimates on Phillips 66 - why the stock might be worth 40% less 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 3 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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