Analyst Jason Gabelman of TD Cowen maintained a Buy rating on Phillips 66, retaining the price target of $145.00.
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Jason Gabelman has given his Buy rating due to a combination of factors that highlight Phillips 66’s potential for growth and stability in its Midstream business. The company has outlined a clear path for organic growth in its Midstream segment, projecting an increase in EBITDA to $4.5 billion by 2027, with further growth anticipated beyond that year. This growth is underpinned by large projects and contractual commitments that assure continued utilization of its y-grade pipelines, addressing investor concerns about potential declines.
Furthermore, Phillips 66’s ability to shift market perception of its Midstream business from one with limited growth prospects to one with durable growth potential could significantly enhance its valuation. The company has also delineated a strategic plan to increase its equity barrels in the Permian, supported by unique contracting arrangements and long-term agreements that extend beyond 2030. These factors collectively suggest a robust growth trajectory for Phillips 66, justifying the Buy rating.
In another report released today, BMO Capital also maintained a Buy rating on the stock with a $160.00 price target.