PSX - Phillips 66 raised at TD Cowen seeing refinery ops rebounding to pre-COVID levels

2023-06-01 15:35:26 ET

Phillips 66 ( NYSE: PSX ) +1.6% in Thursday's trading as TD Cowen upgraded the stock to Outperform from Market Perform with a $123 price target, raised from $110, after badly lagging sector peers since early 2020.

Phillips 66's ( PSX ) refining operations should return to pre-COVID, top-tier performance after dropping to the bottom tier in 2022, flipping from $0.90/bbl better than the peer average to $0.90 worse, TD Cowen said.

The bank noted at the 2022 Analyst Day, Phillips 66 ( PSX ) laid out a renewed focus on the refining segment, guiding for $0.75/bbl operational expense improvement, nearly half the portion not explained by higher turnaround spending.

The company's balance sheet is not as strong as peers, but the analysts see capacity to absorb potential downdraft in margins, estimating the stock is worth more than $100 at mid-cycle cracks excluding its renewable diesel project and buybacks.

More on Phillips 66:

• Financial and valuation comparison to sector peers
• Analysis: Phillips 66: The Stock Is Turning Attractive
• Stock price return: Down 7.5% YTD, down 9.5% in the past 12 months

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