Phillips 66 Signs Agreement with NOVONIX to Produce Lithium-Ion Batteries

Diversified energy manufacturing and logistics company Phillips 66 (NYSE: PSX) recently revealed that it has signed a technology development agreement with the developer and supplier of high-performance materials, equipment and services, NOVONIX Limited, for the production and commercialization of next-generation anode materials for lithium-ion batteries.

The agreement comes on the heels of the recent investment made by Phillips 66 in NOVONIX for a 16% stake in September 2021.

Strategic Impact

While Phillips 66 is a leading global manufacturer of specialty coke, a critical ingredient required for the production of graphite anode material, NOVONIX is a developer and supplier of high-performance materials, equipment, and services for the global lithium-ion battery industry.

The agreement will allow both companies to commercially develop lithium-ion anode materials with reduced carbon-intensive processing.

Management Commentary

The Vice-President of Energy Research & Innovation at Phillips 66, Ann Oglesby, said, “This agreement builds on our strategic investment in NOVONIX and is a natural next step for two companies committed to innovation and a lower-carbon future. It sets the framework for the companies to work closely and collaboratively to accelerate the development of next-generation materials for the U.S. battery supply chain.”

Price Target

Recently, Barclays analyst Theresa Chen reiterated a Buy rating on the stock. The analyst, however, raised the price target from $82 to $95, which implies upside potential of 8.9% from current levels.

Consensus among analysts is a Strong Buy based on 7 Buys and 2 Holds. The average Phillips 66 stock prediction of $94.89 implies upside potential of 8.8% from current levels. Shares have gained 15.7% over the past year.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on PSX. Further, 2.9% of portfolios tracked by TipRanks increased their exposure to PSX stock over the past 30 days.

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