Phillips 66 Just Missed Earnings - But Analysts Have Updated Their Models

Phillips 66 (NYSE:PSX) shareholders are probably feeling a little disappointed, since its shares fell 4.2% to US$118 in the week after its latest full-year results. Statutory earnings per share fell badly short of expectations, coming in at US$4.99, some 22% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$143b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Phillips 66

Taking into account the latest results, the 14 analysts covering Phillips 66 provided consensus estimates of US$129.4b revenue in 2025, which would reflect an uneasy 9.6% decline over the past 12 months. Per-share earnings are expected to jump 90% to US$9.72. Before this earnings report, the analysts had been forecasting revenues of US$139.1b and earnings per share (EPS) of US$8.67 in 2025. Although the analysts have lowered their revenue forecasts, they've also made a substantial gain in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of US$137, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Phillips 66, with the most bullish analyst valuing it at US$162 and the most bearish at US$115 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.6% by the end of 2025. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.6% annually for the foreseeable future. It's pretty clear that Phillips 66's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Phillips 66 following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$137, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Phillips 66 going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Phillips 66 (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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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.