Shares of diversified energy company Phillips 66 (NYSE:PSX) are trending marginally higher today, despite its third-quarter EPS of $4.63 falling short of expectations by $0.19.
During the quarter, the company generated an operating cash flow of $2.7 billion, with its crude utilization rate of 95% rising to its highest level since 2019. Further, increased realized margins drove pre-tax income in PSX’s Refining segment to $1.7 billion, up from $1.1 billion in the prior quarter. Pre-tax income in its Midstream segment also rose to $712 million from $604 million sequentially.
Importantly, PSX is focused on driving its operating performance and executing its strategic priorities. The company aims to monetize more than $3 billion of non-core assets and return at least 50% of its operating cash flow to investors. It has raised its shareholder distributions target to between $13 billion and $15 billion and hiked its mid-cycle adjusted EBITDA growth target to $4 billion by 2025. In addition to its existing $3.1 billion stock buyback authorization, the company’s Board has approved an additional share repurchase program worth $5 billion
Will PSX Stock Go Up?
Overall, the Street has a Moderate Buy consensus rating on Phillips 66. On top of a nearly 11% price gain over the past six months, the average PSX price target of $133 implies a 20.8% potential upside.
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