The Bullish Case for Phillips 66 (PSX)
Phillips 66 (PSX) shares just from the average target price estimates suggest a near 40% return in the next 12 months. Barrons went as far as saying they could pop 50% on restructing.
A quick look at PSX shares as of Friday's close and we see the following stats:
|Ticker||Price||52 Wk-High||52 Wk-Low||P/E||EPS||From 52wk High||From 52wk Low||Finviz TP||% from Finviz TP|
Phillips has already spun off some pipeline assets into Phillips 66 Partners (PSXP), of which it owns more than 70%. It has other assets, including a joint venture with Spectra Energy (SPE) called DCP Midstream Partners (DCP), which processes natural gas liquids.
The company could do more. It could spin out the marketing business, which supplies gasoline, diesel fuel, and aviation fuel under the Phillips 66, Conoco, or 76 brands. Chemicals and refining could also be up for grabs.
Phillips has said it expects midstream Ebitda of $2.3 billion by 2018. But even if it’s just $2 billion, at a multiple of 12 to 15—similar to other midstream companies—that business alone would be worth $24 billion to $30 billion, not too far below Phillips market value.
One fan of the stock is analyst Olsen of Tudor Pickering. On a sum of the parts, based on his 2015 estimates, he thinks Phillips is worth $94 a share, or 55% above last week’s price.
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