Phillips 66 (PSX) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Energy · Oil & Gas Refining & Marketing
Is Phillips 66 a safe investment right now?
Phillips 66's Altman Z-Score of 3.42 places it in the safe zone. Our DCF model estimates intrinsic value at $173.50, suggesting the stock may be undervalued by 10%. Moat rating: 2.3/5 stars.
Could Phillips 66 go bankrupt? Altman Z-Score analysis
Z-Score of 3.42 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives PSX's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.0374 | 1.2 | 0.04 |
| B · Retained Earnings / Total Assets | RE / TA | 0.4076 | 1.4 | 0.57 |
| C · EBIT / Total Assets | EBIT / TA | 0 | 3.3 | 0.0 |
| D · Market Cap / Total Liabilities | MCap / TL | 1.4156 | 0.6 | 0.85 |
| E · Revenue / Total Assets | Rev / TA | 1.9523 | 1.0 | 1.95 |
How has PSX's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2016 | 1.99 | Gray |
| 2017 | 1.78 | Distress |
| 2018 | 2.39 | Gray |
| 2019 | 2.44 | Gray |
| 2020 | 3.87 | Safe |
| 2021 | 3.43 | Safe |
| 2022 | 2.73 | Gray |
| 2023 | 3.66 | Safe |
| 2024 | 3.7 | Safe |
| 2025 | 3.42 | Safe |
Source: Calculated from PSX's latest 10-K filing on SEC EDGAR.
What is Phillips 66 actually worth?
Fair value range: $37.02 — $233.62
Valuation Methods
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $233.62 | 50% | 21.4x avg PE (3 years) × $14.97 forward EPS |
| DCF (Discounted Cash Flow) | $164.29 | 30% | Two-stage DCF: $1.3B TTM FCF, 20.0% growth, 7.3% WACC |
| EV/FCF Multiple | $37.02 | 20% | TTM FCF × 28x multiple + net cash |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 20.0% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | 109.1% | Consensus (20 analysts) |
| Analyst EPS Growth (Next Year) | 11.2% | Consensus |
| Historical 5Y FCF CAGR | 0% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 7.3% | CAPM (Rf=4.3% + 0.76*5.5%) |
| Net Cash / (Debt) | $-20,470M | Balance sheet |
| Base FCF (TTM) | $1.3B | Trailing 12 months |
| Shares Outstanding | 400,982,591 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 7.3% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $50.63 | $37.42 | $57.85 | $27.00 |
| 2.5% | $58.62 | $42.99 | $67.17 | $30.71 |
| 5.0% | $67.78 | $49.35 | $77.87 | $34.92 |
| 7.5% | $80.28 | $57.89 | $92.56 | $40.44 |
Free Cash Flow History
| Year | FCF | Growth |
|---|
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Does Phillips 66 have a durable competitive advantage?
Moat rating: 2.3/5.
What makes up PSX's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 2/5.
How stable is PSX's return on invested capital?
No ROIC history available.
| Year | ROIC | Trend |
|---|
Source: ROIC calculated from SEC EDGAR filings.
Is Phillips 66's dividend safe?
Can Phillips 66 afford its dividend?
Payout ratio is 44.0%. FCF covers the dividend 0.0x. 15 consecutive years of payments.
Phillips 66's key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $147.4B | $170.0B | $64.1B | Rising |
| Net Income | $7.0B | $11.0B | −$4.0B | Rising |
Common questions about Phillips 66
Is Phillips 66 at risk of going bankrupt?
Phillips 66's Altman Z-Score of 3.42 places it in the safe zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is Phillips 66's intrinsic value based on DCF?
Our DCF model estimates Phillips 66's intrinsic value at $173.50 per share. The current margin of safety is 10.2%. This estimate is based on historical free cash flow trends and a risk-adjusted discount rate.
Does Phillips 66 have a competitive moat?
Phillips 66 receives a moat rating of 2.3 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Is Phillips 66's dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
PSX analysis methodology: How we calculate fair value, Z-Scores, and moat ratings