Oil & Gas Refining & Marketing · NYSE
Current Price
$173.49
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Phillips 66 with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for PSXPhillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined petroleum products to market; provides terminaling and storage services for crude oil and refined petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, aviation, and renewable fuels at 12 refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, including gasolines, distillates, and aviation fuels primarily in the United States and Europe. This segment also manufactures and markets specialty products, such as base oils and lubricants. The company was founded in 1875 and is headquartered in Houston, Texas.
ROIC (TTM)
4.3%
ROE (TTM)
14.7%
FCF Yield
1.01%
Based on trailing twelve-month data, PSX shows a free cash flow per share of N/A and a ROIC of 4.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 1.01% are important context metrics when evaluating PSX's stock valuation relative to peers.
The intrinsic value of PSX depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether PSX is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $173.49. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Phillips 66: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Refining & Marketing industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PSX's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Phillips 66, this means projecting how much free cash flow the Oil & Gas Refining & Marketing will produce over the next 5-10 years, then discounting those amounts to today's dollars. PSX's ROIC of 4.3% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PSX, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
