Wells Fargo analyst Roger Read lowered the firm’s price target on Phillips 66 to $127 from $134 and keeps an Overweight rating on the shares. The analyst notes PSX is his top pick among large-cap refiners. This is supported by the 22% implied upside to our price target and Overweight rating. He expects a better relative 2023 for PSX’s refining operations given lower planned TAR activity in 2023 than in 2022. Among the larger overhangs on PSX are closing the acquisition of the LP units associated with its DCP roll-up and the performance of its chemical JV, which encountered a tough second half of 2022, Read adds. PSX has committed to reduce costs while improving operations in 2023 and beyond. The analyst expects the combination of additional debt reduction associated with the PSXP and DCP acquisitions and increased dividends and share repurchases to benefit PSX shareholders in 2023. Given challenges in RD startups throughout the industry, he is not applying a significant value to the West Coast expansion.
Published first on TheFly
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