Does Phillips 66 (PSX) offer a good opportunity for investors?

Phillips 66 (NYSE: PSX) stock fell -2.32% on Friday to $85.51 against a previous-day closing price of $87.54. With 3.54 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.05 million shares. During the session, the Oil & Gas Refining & Marketing company that operates in wider Energy sector, reached to the highest price of $89.83 whereas the lowest price it dropped to was $84.85. The 52-week range on PSX shows that it touched its highest point at $111.28 and its lowest point at $63.19 during that stretch. It currently has a 1-year price target of $114.99. With its current market cap of 40.83 billion, PSX has annualized dividend of $3.88 while the current yield stands at 4.54%. Beta for the stock currently stands at 1.42.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PSX was down-trending over the past week, with a drop of -3.20%, but this was up by 6.37% over a month. Three-month performance dropped to -5.82% while six-month performance fell -2.45%. The stock gained 12.41% in the past year, while it has gained 18.01% so far this year. A look at the trailing 12-month EPS for PSX yields 5.75 with Next year EPS estimates of 10.33. For the next quarter, that number is 4.73. This implies an EPS growth rate of 132.70% for this year and -29.76% for next year. EPS is expected to grow by 6.30% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 0.30%.

Float and Shares Shorts:

On Jul 14, 2022, short shares totaled 10.82 million, which was 2.25% higher than short shares on Jun 14, 2022. In addition to Mr. Greg C. Garland as the firm’s Exec. Chairman, Mr. Mark E. Lashier serves as its Pres, CEO & Director.

Institutional Ownership:

Through their ownership of 72.12% of PSX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.78% of PSX, in contrast to 36.14% held by mutual funds. Shares owned by individuals account for 35.71%. As the largest shareholder in PSX with 9.17% of the stake, The Vanguard Group, Inc. holds 44,097,763 shares worth 44,097,763. A second-largest stockholder of PSX, SSgA Funds Management, Inc., holds 31,814,449 shares, controlling over 6.61% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in PSX, holding 23,857,485 shares or 4.96% stake. With a 2.95% stake in PSX, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 14,187,582 shares are owned by the mutual fund manager. The SPDR Series – Energy Select Secto, which owns about 2.75% of PSX stock, is the second-largest Mutual Fund holder. It holds 13,214,044 shares valued at 1.08 billion. Vanguard 500 Index Fund holds 2.21% of the stake in PSX, owning 10,649,024 shares worth 873.11 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PSX since 20 analysts follow the stock currently. There are 13 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PSX analysts setting a high price target of $130.00 and a low target of $99.90, the average target price over the next 12 months is $114.46. Based on these targets, PSX could surge 52.03% to reach the target high and rise by 16.83% to reach the target low. Reaching the average price target will result in a growth of 33.86% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PSX will report FY 2022 earnings on 01/27/2023. Analysts have provided yearly estimates in a range of $21.62 being high and $9.26 being low. For PSX, this leads to a yearly average estimate of $15.93. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Phillips 66 surprised analysts by $0.82 when it reported $6.77 EPS against a consensus estimate of $5.95. The surprise factor in the prior quarter was $0.09. Based on analyst estimates, the high estimate for the next quarter is $7.02 and the low estimate is $3.79. The average estimate for the next quarter is thus $4.84.

Summary of Insider Activity:

Insiders traded PSX stock several times over the past three months with 10 Buys and 6 Sells. In these transactions, 304,469 shares were bought while 301,370 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 27 over the past year. The total number of shares bought during that period was 665,406 while 480,415 shares were sold.

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