Phillips 66, the Energy sector company, was revisited by a Wall Street analyst today. Analyst Joe Laetsch from Morgan Stanley maintained a Hold rating on the stock and has a $140.00 price target.
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Joe Laetsch has given his Hold rating due to a combination of factors affecting Phillips 66’s financial performance. The refining segment, despite a 20% quarter-over-quarter increase in the refining benchmark, is expected to see limited improvement due to lower utilization rates, weaker capture rates, and one-time expenses. Specifically, the capture rates are anticipated to decline due to weaker jet versus diesel margins and significant crude backwardation, leading to a decrease in earnings compared to the previous quarter.
In addition, while the Chemicals segment is expected to see a sequential improvement in earnings due to higher utilization rates, the Midstream segment is projected to experience a slight decline in earnings due to lower NGL prices and impacts from winding down LA refining assets. The Marketing & Specialty segment is expected to perform within the lower guidance range, and the Renewable Fuels segment faces challenges with lower utilization rates, although this is somewhat offset by increased recognition of PTC credits. These mixed results across segments contribute to the Hold rating for Phillips 66.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $132.00 price target.
Based on the recent corporate insider activity of 66 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PSX in relation to earlier this year.