UPDATE: UBS Starts Phillips 66 (PSX) at Buy; Valuation at Forefront

(Updated - May 18, 2012 1:04 PM EDT)

UBS initiates coverage on Phillips 66 (NYSE: PSX) with a Buy. PT $37.00.

Analyst, Craig Weiland, said, "Arguably the most intriguing element of PSX is the potential monetization of midstream assets embedded in its R&M segment. With refiner equities trading at 3-4x EBITDA & MLPs at material premiums, the value creation of “multiple arbitrage” appears sizable. We expect PSX to confirm its plans on this front before Y/E & conservatively estimate logistics assets embedded within R&M generate EBITDA of $350MM/annum, unlocking $2.5B in incremental R&M segment EV."

Weiland also notes that PSX has shareholders in the forefront, and will likely return cash with dividend payments, debt reduction, and possible share buybacks.

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 $31.26 yesterday.

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