Zacks Investment Research Downgrades Phillips 66 (NYSE:PSX) to Sell

Phillips 66 (NYSE:PSX) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a note issued to investors on Wednesday, July 12th.

According to Zacks, “We are recalibrating our investment thesis on Phillips 66 to ‘Sell’ from ‘Hold’. The company’s shares continue to struggle with stock price increasing just 7.4% over the last 3 months compared with 8.9% improvement for the Zacks Oil Refining & Marketing industry. In particular, investors are apprehensive that PSX’s chemical segment’s earnings are likely to deteriorate as lower oil prices will make global naphtha crackers more competitive with North American ethane crackers and put pressure on margins. As it is, over the past three years (2014–2016), the company’s total revenues declined at a CAGR of 27.7%. The highly volatile nature of the industry and high debt load also keep us worried and may limit Phillips 66's ability to generate positive earnings surprises.”

Several other research analysts have also recently issued reports on PSX. Scotiabank reiterated a “hold” rating and issued a $86.00 price objective on shares of Phillips 66 in a report on Monday, March 27th. Jefferies Group LLC set a $74.00 target price on shares of Phillips 66 and gave the company a “hold” rating in a research note on Wednesday, April 19th. Royal Bank Of Canada reissued a “hold” rating and set a $87.00 target price on shares of Phillips 66 in a research note on Thursday, April 20th. Citigroup Inc. reissued a “neutral” rating and set a $83.00 target price (down from $84.00) on shares of Phillips 66 in a research note on Saturday, April 22nd. Finally, TheStreet raised shares of Phillips 66 from a “c” rating to a “b-” rating in a research note on Friday, April 28th. Two research analysts have rated the stock with a sell rating, seven have assigned a hold rating, three have given a buy rating and one has assigned a strong buy rating to the company. The stock presently has an average rating of “Hold” and an average target price of $83.53.

Phillips 66 (NYSE:PSX) opened at 83.44 on Wednesday. The company has a 50-day moving average price of $83.10 and a 200 day moving average price of $79.85. Phillips 66 has a 12 month low of $75.14 and a 12 month high of $88.87. The stock has a market capitalization of $42.68 billion, a price-to-earnings ratio of 24.95 and a beta of 1.22.

Phillips 66 (NYSE:PSX) last posted its quarterly earnings data on Tuesday, August 1st. The oil and gas company reported $1.09 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.02 by $0.07. The business had revenue of $24.58 billion during the quarter, compared to analysts’ expectations of $25.14 billion. Phillips 66 had a net margin of 1.87% and a return on equity of 6.29%. During the same period last year, the firm posted $0.94 earnings per share. Equities analysts predict that Phillips 66 will post $4.05 earnings per share for the current year.

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Several hedge funds and other institutional investors have recently made changes to their positions in the company. DZ BANK AG Deutsche Zentral Genossenschafts Bank Frankfurt am Main acquired a new position in shares of Phillips 66 during the fourth quarter valued at approximately $89,476,000. Capital Guardian Trust Co. raised its position in Phillips 66 by 153.0% in the fourth quarter. Capital Guardian Trust Co. now owns 3,325 shares of the oil and gas company’s stock worth $287,000 after buying an additional 2,011 shares during the last quarter. ARS Investment Partners LLC raised its position in Phillips 66 by 1.2% in the fourth quarter. ARS Investment Partners LLC now owns 178,707 shares of the oil and gas company’s stock worth $15,442,000 after buying an additional 2,084 shares during the last quarter. Barings LLC purchased a new position in Phillips 66 during the fourth quarter worth about $1,640,000. Finally, CAMG Solamere Management LLC purchased a new position in Phillips 66 during the fourth quarter worth about $564,000. Institutional investors own 69.78% of the company’s stock.

Phillips 66 Company Profile

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States.

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