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Phillips 66 (PSX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Tractor Supply (TSCO) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Phillips 66 (PSX) closed at $98.08 in the latest trading session, marking a +0.71% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.7%. At the same time, the Dow added 0.58%, and the tech-heavy Nasdaq gained 0.69%.

Prior to today's trading, shares of the oil refiner had gained 3.61% over the past month. This has outpaced the Oils-Energy sector's gain of 1.36% and the S&P 500's gain of 1.95% in that time.

Wall Street will be looking for positivity from PSX as it approaches its next earnings report date. The company is expected to report EPS of $1.02, down 1.92% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $26.68 billion, up 10.95% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.39 per share and revenue of $123.20 billion, which would represent changes of -28.35% and +7.87%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PSX. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.25% lower. PSX is currently a Zacks Rank #3 (Hold).

Investors should also note PSX's current valuation metrics, including its Forward P/E ratio of 11.6. This represents a premium compared to its industry's average Forward P/E of 11.51.

Also, we should mention that PSX has a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Refining and Marketing stocks are, on average, holding a PEG ratio of 1.19 based on yesterday's closing prices.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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