2024-01-24 14:41:30 ET
Summary
- Activist investor group Elliot Management invested $1 billion in Phillips 66 and claims its plan can unleash significant shareholder value.
- Elliot points out that PSX has significantly lagged behind its refining peers like Valero and Marathon Petroleum and says its plan could increase PSX stock to $200/share.
- However, PSX already had a plan to increase shareholder returns, and both plans focus on reducing PSX's op-ex/bbl and on selling non-core assets.
- Unfortunately, one of the biggest obstacles to increasing PSX's performance is its Chemicals Segment, which appears to be in a race to the bottom with Exxon, DOW, and others.
Last November, Reuters reported that activist investor group Elliot Management took a $1 billion dollar stake in Phillips 66 ( PSX ). In a letter to Phillips 66 management , Elliot pointed out what I have been writing about on Seeking Alpha for quite some time: PSX has been significantly lagging the returns of refining peers Valero Energy Corporation ( VLO ) and Marathon Petroleum Corporation ( MPC ) for many years (see graphic below). Elliot proposed a pathway that it believes could take the stock to $200/share (+50% from the current $132 share price). Today, I'll dig a bit deeper to see if that target is reasonable. If so, shares of PSX would obviously represent excellent value here....
Read the full article on Seeking Alpha
For further details see:
Phillips 66: Analyzing Activist Elliot Management's $200 Price Target