Why Phillips 66 (PSX) Stock Is Falling On Wednesday

NEW YORK (TheStreet) --Shares of Phillips 66 (PSX) are down -3.51% to $81.92 on Wednesday morning as the oil and gas refining industry takes a hit after the Obama administration gave just two U.S. energy companies, Pioneer Natural Resources Co. (PXD) and Enterprise Products Partners LP (EPD), permission to export condensate to foreign buyers, the Wall Street Journal reports.

Condensate is a type of ultralight oil that buyers could convert into gasoline, jet fuel, and diesel.

The shipments could begin as early as August, and for now the rulings apply only to these two companies. For almost 40-years the U.S. banned the export of American oil.

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Other stocks that have declined include Valero Energy (VLO) down -8.00 % to $51.51, Marathon Petroleum (MPC) lower by -5.58% to $81.63, and HollyFrontier (HFC) down -6.17% to $45.95.

Separately, TheStreet Ratings team rates PHILLIPS 66 as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate PHILLIPS 66 (PSX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, PSX's share price has jumped by 33.99%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PSX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 11.7% when compared to the same quarter one year prior, going from $1,407.00 million to $1,572.00 million.
  • PSX's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.2%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: PSX Ratings Report
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