Story updated at 10 a.m. to reflect market activity.
Shares of Phillips 66 fell 0.2% to $76.55 in morning trading.
The increase is driven by a deep inventory of growth investment in the midstream."We expect PSX's chemicals and refining businesses to benefit from multi-year feedstock cost discounts sustained by growing North American unconventional crude, natural gas, and NGL production," analyst Craig Weiland wrote. "In our view, shares should also benefit from PSX's growth initiatives, which are centered on its commodity chemicals and midstream operations, which have traditionally garnered higher multiples from investors than refining." Must read: Warren Buffett's 10 Favorite Growth Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. ----------- Separately, TheStreet Ratings team rates PHILLIPS 66 as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate PHILLIPS 66 (PSX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.04% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 16.7% when compared to the same quarter one year prior, going from $708.00 million to $826.00 million.
- PHILLIPS 66 has improved earnings per share by 22.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PHILLIPS 66 reported lower earnings of $5.91 versus $6.41 in the prior year. This year, the market expects an improvement in earnings ($7.31 versus $5.91).
- The gross profit margin for PHILLIPS 66 is currently extremely low, coming in at 2.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.09% trails that of the industry average.
- Net operating cash flow has decreased to $897.00 million or 31.26% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PHILLIPS 66 has marginally lower results.
- You can view the full analysis from the report here: PSX Ratings Report
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