phillips 66 (PSX – (Free Report) recently appeared on the list of most searched stocks on Zacks.com. Therefore, you may need to consider some important factors that may influence the stock's performance in the near future.
The oil refiner's stock has returned +1.6% over the past month. In comparison, the Zacks S&P 500 Composite Index, +3.4% was unchanged. The Zacks Oil & Gas – Refining & Marketing industry, which Phillips 66 belongs to, has gained 3.2% in this period. The key question here is where the stock is likely to go in the short term.
While media releases and rumors about significant changes in a company's business prospects typically cause its stock to “trend” and lead to immediate price movements, there are some fundamentals that ultimately govern buy-and-hold decisions. There are always facts.
Regarding revisions to performance forecasts
At Zacks, we prioritize evaluating changes in company earnings estimates rather than focusing on anything else. This is because we believe that the fair value of a stock is determined by the present value of its future income stream.
Our analysis is fundamentally based on how the sell-side analysts covering a given stock are revising their earnings estimates to account for the latest business trends. As a company's earnings expectations rise, so does the fair value of its stock. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, which causes the stock price to rise. For this reason, empirical research has shown that there is a strong correlation between trends in earnings forecast revisions and short-term stock price movements.
For the current quarter, Phillips 66 is expected to post earnings of $2.58 per share, representing a decline of 38.7% from the year-ago period. The Zacks Consensus Estimate has changed -3.7% over the past 30 days.
The consensus earnings estimate for the current fiscal year of $13.06 represents a -17.4% change from the prior year. Over the past 30 days, this estimate has changed by +2.2%.
Next year's consensus earnings estimate of $13.62 represents a +4.3% change from the earnings that Phillips 66 was expected to report a year ago. Over the past month, the forecast has changed by +0.9%.
The Zacks Rank, a proprietary stock evaluation tool with an impressive, outside-audited track record of impressive results, harnesses the power of earnings estimate revisions to be a more conclusive indicator of a stock's short-term price performance. . The magnitude of the recent consensus estimate change, along with three of his other factors related to the earnings estimate, give Phillips 66 a Zacks Rank of #3 (Hold).
The chart below shows the company's consensus EPS estimate over the next 12 months over time.
12 months EPS
Revenue growth forecast
There's no question that a company's profit growth is the best indicator of its financial health, but nothing will happen if it doesn't make a profit. It's nearly impossible for a company to expand its bottom line without growing it over the long term. Therefore, it's important to know a company's earnings growth potential.
Phillips 66's consensus revenue estimate for the current quarter is $31.71 billion, representing a year-over-year change of -9.6%. For the current and next fiscal year, the $133.96 billion and $135.21 billion forecasts represent changes of -10.6% and +0.9%, respectively.
Last reported results and surprising details
Phillips 66 reported revenue of $38.74 billion in its last reported quarter. This represents a -5.3% year-over-year change. EPS for the same period was $3.09, compared to $4 a year ago.
The reported earnings represent a surprise of +12.93% when compared to the Zacks Consensus Estimate of $34.3 billion. EPS surprise was +30.38%.
Over the last four quarters, Phillips 66 has surpassed consensus EPS estimates three times. The company has surpassed consensus revenue estimates three times during this period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. Whether a stock's current price accurately reflects the intrinsic value of the underlying business and the company's growth prospects is a key determinant of future stock performance.
Compare the current value of a company's valuation multiples, such as price to earnings (P/E), price to sales (P/S), and price to cash flow (P/CF), to its own value, while also Value helps determine whether a stock is fairly valued, overvalued, or undervalued, and by comparing a company to its peers based on these parameters, you can determine whether a stock is reasonably priced. I can understand the gender.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) categorizes stocks into five groups, ranging from A to F, with A being B B is better than C, and so on), and can help identify whether a stock is overvalued, fairly valued, or temporarily undervalued. Masu.
Phillips 66 is rated A on this score, indicating that it trades at a discount compared to its industry peers. Click here to see the values of some of the metrics that determined this grade.
conclusion
The facts discussed here, and much of the other information on Zacks.com, may help you decide whether the market buzz surrounding Phillips 66 is worth paying attention to. However, the company's Zacks Rank #3 suggests that Phillips 66 may perform in line with the broader market. Near future.
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