Phillips 66 (PSX) Is Down 8.8% After ESOP Share Offering And Western Gateway Update - What's Changed

• In December 2025, Phillips 66 filed a US$1.72 billion shelf registration to offer 13,000,000 common shares for an ESOP-related transaction, while also announcing with Kinder Morgan that the Western Gateway Pipeline’s initial open season had closed following strong shipper interest.
• The planned second open season in January 2026 for remaining Western Gateway capacity, including new destinations west of Colton, California, underscores Phillips 66’s push to strengthen its refined products logistics reach into key Western US markets.
• We will now examine how shipper interest in the Western Gateway Pipeline and its expanded Western US access may influence Phillips 66’s investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

Phillips 66 Investment Narrative Recap

To own Phillips 66, you need to be comfortable with a refining and midstream story that leans on logistics growth to offset margin pressure and turnaround noise. The Western Gateway Pipeline progress supports that midstream earnings stability remains the key near term catalyst, while the ESOP related shelf registration does not appear to materially change the biggest current risk, which is weaker refining and renewable fuels profitability combined with ongoing operational disruptions.

The Western Gateway open season update is especially relevant here because it speaks directly to Phillips 66’s effort to grow fee based Midstream cash flows and diversify away from more volatile refining margins. Strong shipper interest and the planned second open season into Western US markets sit alongside ongoing buybacks and dividends, reinforcing that capital intensive growth in logistics is occurring at the same time as the company manages pressured margins and legal and LA refinery related headwinds.

Yet investors should be aware that the same LA refinery shutdown that supports long term portfolio rationalization also introduces near term earnings and depreciation risks that...

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

Phillips 66's narrative projects $120.0 billion revenue and $5.2 billion earnings by 2028.

Uncover how Phillips 66's forecasts yield a $148.85 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Eight members of the Simply Wall St Community place Phillips 66’s fair value between US$80.65 and US$444.64, reflecting extremely wide individual views. You can weigh those against the current tension between midstream growth catalysts and near term refining, renewable fuels and legal risks that could influence how the business actually performs over time.

Explore 8 other fair value estimates on Phillips 66 - why the stock might be worth 37% 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 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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