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UPDATE: Credit Suisse Upgrades Phillips 66 (PSX) to Outperform

November 17, 2014 7:41 AM EST
Get Alerts PSX Hot Sheet
Price: $163.34 +2.76%

Rating Summary:
    19 Buy, 5 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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(Updated - November 17, 2014 11:01 AM EST)

Credit Suisse upgraded Phillips 66 (NYSE: PSX) from Neutral to Outperform with a price target of $95 (unchanged). Analyst Edward Westlake thinks oil weakness creates an attractive entry.

"PSX shares have underperformed peers on a correct market view that falling oil prices would impact near term earnings at the PSX chemical business and some of its midstream assets. We lower near term 2015 EPS by 7%. However, this near term noise creates an entry point," said Westlake.

"Lower front end oil prices do not affect our longer term forecasts which were based around $80/bbl WTI nor do they affect management's ability to build a significantly larger and higher multiple business in a few years while at the same time returning cash to shareholders (2.8% yield). Indeed, if you believe DOW, then polyethylene margin expansion could mean our chemical cuts are too harsh. Clearly we're no longer at $30/sh when some suggested PSX looked like VLO (it does not), but our medium term share price target is $112/sh and 12mth target is $95/sh. The market seems to have over-reactedand so we are upgrading PSX to Outperform from Neutral," he added.

For an analyst ratings summary and ratings history on Phillips 66 click here. For more ratings news on Phillips 66 click here.

Shares of Phillips 66 closed at $71.78 yesterday.



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