Phillips 66 PSX is set to report second-quarter 2026 results on Aug. 5, before the opening bell.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $7.68 per share, implying an improvement of 222.7% from the year-ago reported number. It has witnessed no estimate revisions in the past seven days. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $36.2 billion, suggesting an improvement of 7.9% from the year-ago actuals.
PSX beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 67.8%. This is depicted in the graph below:
Q2 Earnings Whispers for PSX
Our proven model doesn’t predict an earnings beat for PSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That isn’t the case here.
The leading refining player has an Earnings ESP of 0.00%. PSX currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PSX’s Factors to Note
To have an idea of how oil prices behaved in the June quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK, WTI spot prices for April, May and June of this year were $100.32 per barrel, $102.13 per barrel and $84.81 per barrel, respectively, per EIA data. Commodity prices were $63.54 per barrel, $62.17 per barrel and $68.17 per barrel, respectively, in April, May and June of 2025, according to the EIA.
A constructive oil-price backdrop, driven by the Iran war, is likely to have hurt the refining business of Phillips 66 in the second quarter, since the input costs to produce final products like gasoline, diesel fuel and others were higher. A similar dynamic is likely to have affected Par Pacific Holdings, Inc. PARR and Valero Energy Corporation VLO, belonging to the same space.
However, the high utilization of refineries in the United States to meet resilient demand is likely to have largely offset the negative impacts of high input costs.
PSX’s Price Performance & Valuation
PSX's stock has surged 67.3% over the past year, outperforming the industry’s 60.5% growth. PARR has jumped 164.7% over the same time frame, while VLO has gained 119.4%.
One-Year Price Chart
With PSX’s stock price outperforming the industry, the company appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) is 14.30x, reflecting that it is trading at a premium compared with the industry average of 6.20x. Both VLO and PARR are valued lower at 9.24x and 6.20x, respectively.
Investment Thesis of PSX
West Texas Intermediate (“WTI”) oil is currently trading at more than $80 per barrel, according to data from Oilprice.com, although high, but still significantly down from the mark of more than $100 per barrel reached in May this year. Phillips 66, like Valero Energy and Par, is likely to gain from the current relatively softer crude pricing environment. This is because PSX, a leading refining company, is now able to purchase oil at a lower cost, enabling the production of end products. Thus, Phillips 66, which generates significant margin from its refining activities, is likely to benefit.
PSX, unlike most of its refining peers, has diversified its business across midstream and chemicals. Along with investing in refining operations, Phillips 66 is allocating significant capital for midstream.
The midstream business, by its very definition, is stable since the company generates stable cash flows as the assets are being utilized for the long term and is less vulnerable to commodity price volatility. Hence, having a diversified business model, PSX is insulated from commodity price volatility to a great extent.
Last Word
Given its relatively stable business model, it might be the ideal time for investors to bet on the stock. In fact, investors are willing to pay a premium for this stock as reflected in the valuation picture.
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Phillips 66 (PSX): Free Stock Analysis Report
Valero Energy Corporation (VLO): Free Stock Analysis Report
Par Pacific Holdings, Inc. (PARR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).