Phillips 66 (PSX) Stock Valuation — PE Analysis
Oil & Gas Refining & Marketing · NYSE
Current Price
$259.47
PE Ratio (TTM)
14.7x
Intrinsic Value
$307.73
+15.7% margin of safety
COMPETITIVE MOAT
↑Integrated Midstream Infrastructure
Phillips 66 operates a significant network of pipelines and terminals. This integrated infrastructure creates high switching costs for customers and provides a stable, fee-based revenue stream.
↑Refining Scale and Efficiency
The company's large-scale, complex refineries offer operational efficiencies and the ability to process a wider range of crude oils. This scale provides a cost advantage over smaller competitors.
↑Strategic Asset Locations
Phillips 66's refining assets are strategically located near supply sources and demand centers. This geographic advantage reduces transportation costs and enhances market access.
INVESTMENT RISKS
↓Refining Margin Volatility
Refining margins are inherently cyclical and can be significantly impacted by crude oil prices, product demand, and refinery utilization rates. This volatility can lead to unpredictable earnings.
↓Competition from Peers
Phillips 66 faces intense competition from other major refiners and marketers, including those with potentially lower valuations or stronger balance sheets like Cenovus. This competition can pressure margins and market share.
↓Capital Intensity and Project Execution
The refining and midstream industries are capital-intensive, requiring significant ongoing investment. Delays or cost overruns in major projects can negatively impact financial performance.
Base case
PSX base case PE valuation
At a current price of $259.47, the base case PE valuation puts PSX fair value near $307.73 per share. That figure assumes 7.0% yearly earnings growth, a target PE multiple of 14.67x, and a 10% discount rate.
Intrinsic Value
$307.73
Margin of safety
+15.7%
Expected annual return
+3.5%
Base case assumptions: 7.0% annual earnings growth, 14.67x target PE, 10% discount rate, 5 year projection. Data as of 2026-09-11.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PSX PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Phillips 66 respond.
Open PE Calculator for PSXCompany Overview
Phillips 66 operates as a diversified energy company, specializing in both manufacturing and logistics. Its comprehensive business model is structured across four primary segments: Midstream, Chemicals, Refining, and Marketing & Specialties (M&S). The Midstream division manages the vital infrastructure for transporting and processing various energy commodities. This includes moving crude oil and other feedstocks, delivering refined petroleum products to market, offering terminaling and storage solutions, and handling natural gas liquids (NGLs) through processes like transportation, storage, fractionation, export, and marketing. It also provides fee-based processing services and oversees the gathering, processing, transportation, and marketing of natural gas. The Chemicals segment is dedicated to the production and distribution of a broad spectrum of chemical products. This encompasses olefins like ethylene, aromatics and styrenics such as benzene, cyclohexane, styrene, and polystyrene, alongside various specialty chemicals. These specialty products include organosulfur compounds, solvents, catalysts, and chemicals utilized in drilling and mining operations. Through its Refining segment, Phillips 66 transforms crude oil and other feedstocks into essential petroleum products. These include different grades of gasoline, distillates, aviation fuels, and renewable fuels, processed at its network of 12 refineries located in the United States and Europe. The Marketing & Specialties (M&S) segment focuses on the procurement, resale, and marketing of refined petroleum products like gasolines, distillates, and aviation fuels, primarily serving markets in the United States and Europe. This segment also manufactures and distributes specialized products, including base oils and lubricants. Phillips 66, founded in 1875, is headquartered in Houston, Texas.
Financial Metrics — PSX PE Stock Valuation Data
PE Ratio (TTM)
14.7x
PEG Ratio
0.05
Earnings Yield
6.82%
ROE (TTM)
24.4%
Revenue/Share (TTM)
$383.09
Dividend Yield
1.93%
Debt/Equity
0.65x
Frequently Asked Questions
What is the PE ratio of PSX?
The trailing twelve-month PE ratio of PSX reflects how much investors pay per dollar of Phillips 66's earnings. This metric is most useful when compared to Oil & Gas Refining & Marketing peers and the company's own historical range.
Is PSX overvalued based on PE ratio?
PSX's PE of 14.7x combined with a PEG ratio of 0.05 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Refining & Marketing, a DCF analysis may be more appropriate.
How do I value PSX stock using PE ratio?
To value Phillips 66 using PE: (1) Compare the current PE (14.7x) against the Oil & Gas Refining & Marketing median to assess relative pricing, (2) check the PEG ratio (0.05) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of PSX?
PSX's PEG ratio is 0.05, calculated by dividing the PE ratio (14.7x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for PSX stock valuation?
PE ratio gives a quick relative read — how PSX is priced versus Oil & Gas Refining & Marketing peers. DCF provides an absolute value based on projected free cash flows. For PSX, with a strong ROE of 24.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See PSX DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value PSX with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.