Is Phillips 66 Stock Underperforming the S&P 500?

Energy - Phillips 66 vintage sign- by BD Images via iStock

Phillips 66 (PSX) operates as an energy manufacturing and logistics leader based in Houston, Texas. With a market cap of $58.5 billion, the company engages in refining, midstream operations, chemicals production, and marketing and specialties across the global energy sector.

Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Phillips 66 fits this criterion perfectly, exceeding the mark. Phillips 66 is renowned for its global leadership in refining, marketing, and transporting natural gas liquids and petrochemicals. The company is anchored by substantial revenues, a Fortune 500 ranking, and extensive ownership of service station brands.

However, the oil refiner has dipped almost 21% from its 52-week high of $174.08, achieved in April. Shares of PSX are down 13.3% over the past three months, underperforming the broader S&P 500 Index's ($SPX) 4.3% gains over the same time frame.

Longer term, Phillips 66 is up 3.6% on a YTD basis, lagging behind SPX's 14.6% gains. However, shares of PSX have surged 47.9% over the past 52 weeks, outperforming SPX's 25.2% returns over the same time frame.

PSX has been trading above its 200-day moving average since mid-July last year, indicating a bullish price trend. But it has been trading below its 50-day moving average since late April.

Phillips 66 has outperformed over the past year due to strong revenue growth driven by higher crude oil prices and operational improvements. Nonetheless, the stock plunged nearly 3.7% on Apr. 26 after its Q1 earnings release due to a reported earnings miss caused by lower refining margins, increased costs from a renewables conversion project at their Rodeo refinery, and underperformance in refining operations compared to market expectations.

Also, Phillips 66’s rival Valero Energy Corporation (VLO) has gained 36.3% over the past 52 weeks, underperforming PSX. Meanwhile, shares of Valero Energy are up 17.1% on a YTD basis, outpacing PSX over the same period.

Despite the stock’s relatively mixed price action, analysts are cautiously optimistic about PSX’s prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts in coverage, and it is currently trading below the mean price target of $158.56.

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On the date of publication, Sohini Mondal 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.