Earnings Preview: What to Expect From Phillips' Report

Barchart · 10/16 04:13

Phillips 66 (PSX), headquartered in Houston, Texas, operates as an energy manufacturing and logistics company. With a market cap of $57.4 billion, the company’s operations include oil refining, marketing, and transportation along with chemical manufacturing and power generation. The leading integrated downstream energy provider is expected to announce its fiscal third-quarter earnings for 2024 before the market opens on Tuesday, Oct. 29.

Ahead of the event, analysts expect PSX to report a profit of $1.69 per share on a diluted basis, down 63.5% from $4.63 per share in the year-ago quarter. The company beat the consensus estimates in two of the last four quarters while missing the forecast on two other occasions.

For the full year, analysts expect PSX to report EPS of $7.85, down 50.4% from $15.81 in fiscal 2023. However, its EPS is expected to rise 30.6% year over year to $10.25 in fiscal 2025.

PSX stock has underperformed the S&P 500’s ($SPX) 34.4% gains over the past 52 weeks, with shares up 18.8% during this period. However, it outperformed the Energy Select Sector SPDR Fund’s (XLE) marginal gains over the same time frame.

PSX's underperformance is largely due to the challenging oil pricing environment, which has deterred investor interest in energy companies. PSX's refining business is particularly vulnerable to fluctuations in commodity prices, as its operations rely on raw crude oil. Increasing input costs have negatively impacted the company's refining segment, while the emergence of new refinery capacities is expected to further depress refining margins in the near future.

On Jul. 30, PSX shares closed up more than 4% after reporting its Q2 results. Its adjusted EPS of $2.31 topped Wall Street expectations of $2.12. The company’s adjusted EBITDA stood at $2.2 billion, up 12.4% from the prior quarter.

Analysts’ consensus opinion on PSX stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 18 analysts covering the stock, 10 advise a “Strong Buy” rating, one suggests a “Moderate Buy” rating, and seven give a “Hold.” PSX’s average analyst price target is $146.81, indicating a potential upside of 11.7% from the current levels.

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On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.