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Phillips 66 Stock Up Almost 40% in a Year: Is it too Late to Get In?
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Key Takeaways
Phillips 66 is up 39.5% in a year, beating the industry's 37.9% rise amid stronger fundamentals.
Softer WTI oil prices may aid PSX's refining margins by lowering crude purchase costs.
PSX's midstream and chemicals businesses add stability, while 2026 earnings estimates have risen.
Phillips 66 (PSX - Free Report) has surged 39.5% over the past year, outperforming the 37.9% improvement of the composite stocks in the industry. Following the run-up, investors who are not invested in the stock might think it’s too late to bet on the stock right away. However, before concluding on this point, let’s analyze the large-cap stock’s fundamentals and the overall business environment.
Image Source: Zacks Investment Research
How Softer Oil Is Aiding Phillips 66's Refining Segment
West Texas Intermediate (“WTI”) oil is currently trading below $70 per barrel, according to data from Oilprice.com, significantly down from the mark of more than $100 per barrel reached in May this year. Phillips 66, like Valero Energy Corporation (VLO - Free Report) and Par Pacific Holdings, Inc. (PARR - Free Report) , two other players belonging to the same space, is likely to gain from the softer crude pricing environment.
This is because PSX, a leading refining company, is now able to purchase oil at a lower cost, enabling the production of end products. Thus, Phillips 66, which generates significant margin from its refining activities, is likely to benefit from lower oil prices.
Resilient Business Model of PSX
Although a leading refiner, PSX, unlike most of its refining peers, has diversified the business across midstream and chemicals. Along with investing in refining operations, Phillips 66 is allocating significant capital for midstream.
Midstream business, by its very definition, is stable since the company generates stable cash flows as the assets are being utilized for the long term and is less vulnerable to commodity price volatility. Hence, having a diversified business model, PSX is insulated from the commodity price volatility to a great extent.
For 2026, the leading refining player has witnessed upward earnings estimate revisions over the past seven days, as evident from the snapshot below. Likewise, Valero Energy and Par Pacific have also witnessed upward revisions for 2026 estimates over the same time frame.
Image Source: Zacks Investment Research
What to Do With the Stock?
Now, turning to the valuation picture, it seems investors are willing to pay a premium for the stock, given the resilience of the large-cap refiner’s business model. It is to be noted that Phillips 66 is trading at a trailing 12-month EV/EBITDA multiple of 12.64x, which is higher than the broader industry average of 5.49x. Valero Energy and Par Pacific Holdings, two other refiners, are valued at 8.16x and 4.65x, respectively.
Image Source: Zacks Investment Research
Thus, PSX appears to be a compelling investment at current levels, supported by a favorable refining and midstream operating environment, as well as upward earnings estimate revisions that are being reflected in its premium valuation. Currently, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
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Phillips 66 Stock Up Almost 40% in a Year: Is it too Late to Get In?
Key Takeaways
Phillips 66 (PSX - Free Report) has surged 39.5% over the past year, outperforming the 37.9% improvement of the composite stocks in the industry. Following the run-up, investors who are not invested in the stock might think it’s too late to bet on the stock right away. However, before concluding on this point, let’s analyze the large-cap stock’s fundamentals and the overall business environment.
How Softer Oil Is Aiding Phillips 66's Refining Segment
West Texas Intermediate (“WTI”) oil is currently trading below $70 per barrel, according to data from Oilprice.com, significantly down from the mark of more than $100 per barrel reached in May this year. Phillips 66, like Valero Energy Corporation (VLO - Free Report) and Par Pacific Holdings, Inc. (PARR - Free Report) , two other players belonging to the same space, is likely to gain from the softer crude pricing environment.
This is because PSX, a leading refining company, is now able to purchase oil at a lower cost, enabling the production of end products. Thus, Phillips 66, which generates significant margin from its refining activities, is likely to benefit from lower oil prices.
Resilient Business Model of PSX
Although a leading refiner, PSX, unlike most of its refining peers, has diversified the business across midstream and chemicals. Along with investing in refining operations, Phillips 66 is allocating significant capital for midstream.
Midstream business, by its very definition, is stable since the company generates stable cash flows as the assets are being utilized for the long term and is less vulnerable to commodity price volatility. Hence, having a diversified business model, PSX is insulated from the commodity price volatility to a great extent.
Phillips 66’s Positive Earnings Estimate Revisions
For 2026, the leading refining player has witnessed upward earnings estimate revisions over the past seven days, as evident from the snapshot below. Likewise, Valero Energy and Par Pacific have also witnessed upward revisions for 2026 estimates over the same time frame.
What to Do With the Stock?
Now, turning to the valuation picture, it seems investors are willing to pay a premium for the stock, given the resilience of the large-cap refiner’s business model. It is to be noted that Phillips 66 is trading at a trailing 12-month EV/EBITDA multiple of 12.64x, which is higher than the broader industry average of 5.49x. Valero Energy and Par Pacific Holdings, two other refiners, are valued at 8.16x and 4.65x, respectively.
Thus, PSX appears to be a compelling investment at current levels, supported by a favorable refining and midstream operating environment, as well as upward earnings estimate revisions that are being reflected in its premium valuation. Currently, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.