Is Phillips 66 (PSX) A Risky Investment?

Phillips 66 (NYSE:PSX) finished Tuesday with an addition of $1.04 to close at $78.39, an upside of 1.34 percent. An average of 4,422,480 shares of common stock have been traded in the last five days. There was a gain of $8.43 in the past week. The last 20 days have seen an average of 3,594,155 shares traded, while the 50-day average volume stands at 3,139,154.

PSX stock has increased by 14.04% in the last month. The company shares reached their 1-month lowest point of $63.19 on 09/20/21. With the stock rallying to its 52-week high on 06/10/21, shares of the company touched a low of $43.27 and a high of $94.34 in 52 weeks. In spite of this, the price is down -16.91% from the 52-week high.


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Insider Transactions

210 days have passed since Phillips 66 (PSX) last reported insider trading activity. Garland Greg C., who is Chairman and CEO, most recently acquired $158,500 shares at $88.50 per share on Mar 11. In this transaction, the insider spent $14,026,750. Executive Vice President, Mandell Brian, disposed of 1 shares at a price of $87.35 on Mar 08. The insider now owns more than $61 worth of shares.

Valuation Metrics

Phillips 66 (PSX) has a trailing price-to-earnings (P/E) ratio of 18.90 for the broader industry and 18.77 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Phillips 66’s PE ratio has ranged between 131.96 and 5.885. The stock’s beta is 1.64. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.41, the price-to-book (PB) ratio at 1.90.

Phillips 66 pays a $3.60 dividend per share annually. It offers a dividend yield of 4.59%. The company’s most recent quarterly dividend payment took place on Sep. 1, and it was $0.88 a share, without any change from last year. Its dividend has been increased for the last 1 consecutive years with the latest decrease dividend $0.02 reported on Wednesday February 10 2021. Dividends have grown by 31.87% each year over the last three years.

Phillips 66 will next go ex-dividend on 17-Nov. The next dividend payment Phillips 66 will make is expected to be $0.90.

The quick ratio of Phillips 66 for the three months ended June 29 was 0.80, and the current ratio was 1.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.71 and a total debt to equity ratio of 0.85 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 7.40% against a 5-year average of 14.8%. Phillips 66’s EBITDA margin for the year ending June 29 is -0.65%, while its operating margin for the same period stands at -4.60%. Its gross profit as reported stood at -$5.64 billion compared to revenue of $64.13 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Phillips 66’s return on assets was -3.10%, compared to 4.3% over the last five years. In the past year, the return on investment has been -13.10%, and the 5-year average is 7.5%. Meanwhile, the return on equity (ROE) for the past 12 months has been -9.10% and the 5-year average holds at 9.0%. For the broader industry, ROE averaged 12.45 over the past year.

Earnings Surprise

The analyst consensus anticipated Phillips 66’s latest quarter earnings to come in at $0.6 per share, but it turned out to be $0.74, a 23.30% surprise. For the quarter, EBITDA amounted to $110.0 million. Shareholders own equity worth $437.99 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Phillips 66 (PSX) price momentum. RSI 9-day as of the close on 05 October was 80.84%, suggesting the stock is Overbought, with historical volatility in this time frame at 31.03%.

As of today, PSX’s price is $74.81 +12.05% or $8.43 from its 5-day moving average. PSX is currently trading +17.02% higher than its 20-day SMA and -10.62% lower than its 100-day SMA. However, the stock’s current price level is +5.17% above the SMA50 and +17.26% above the SMA200.

The stochastic %K and %D were 94.97% and 92.64%, respectively, and the average true range (ATR) was 2.41. With the 14-day stochastic at 96.63% and the average true range at 2.32, the RSI (14) stands at 71.64%. The stock has reached 4.47 on the 9-day MACD Oscillator while the 14-day reading was at 6.84.

Analyst Ratings

Piper Sandler upgraded Phillips 66 (NYSE: PSX) to a an Overweight rating in its most recent analyst report. Previously, the stock was rated as a a Neutral.The consensus rating for Phillips 66 (PSX) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell PSX, while 7 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 12 others rate it as a “buy”.

What is PSX’s price target for the next 12 months?

Analysts predict a range of price targets between $70.00 and $107.00, with a median target of $88.00. Taking a look at these predictions, the average price target given by analysts for Phillips 66 (PSX) stock is $88.59.

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