Intrinsic value of Phillips 66 - PSX

Previous Close

$105.29

  Intrinsic Value

$415.02

stock screener

  Rating & Target

str. buy

+294%

Previous close

$105.29

 
Intrinsic value

$415.02

 
Up/down potential

+294%

 
Rating

str. buy

We calculate the intrinsic value of PSX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -14.39
  19.70
  18.23
  16.91
  15.72
  14.64
  13.68
  12.81
  12.03
  11.33
  10.70
  10.13
  9.61
  9.15
  8.74
  8.36
  8.03
  7.72
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
  6.06
  5.95
  5.85
  5.77
  5.69
Revenue, $m
  84,730
  101,422
  119,911
  140,184
  162,216
  185,972
  211,414
  238,500
  267,194
  297,462
  329,275
  362,616
  397,475
  433,850
  471,754
  511,206
  552,239
  594,893
  639,222
  685,287
  733,159
  782,920
  834,659
  888,475
  944,474
  1,002,772
  1,063,493
  1,126,768
  1,192,739
  1,261,551
  1,333,364
Variable operating expenses, $m
 
  79,856
  94,354
  110,251
  127,527
  146,155
  166,105
  187,345
  209,845
  233,579
  258,525
  284,342
  311,676
  340,200
  369,921
  400,858
  433,033
  466,480
  501,240
  537,361
  574,900
  613,919
  654,490
  696,689
  740,600
  786,314
  833,928
  883,545
  935,275
  989,234
  1,045,545
Fixed operating expenses, $m
 
  17,422
  17,857
  18,304
  18,762
  19,231
  19,711
  20,204
  20,709
  21,227
  21,758
  22,302
  22,859
  23,431
  24,016
  24,617
  25,232
  25,863
  26,510
  27,172
  27,852
  28,548
  29,262
  29,993
  30,743
  31,511
  32,299
  33,107
  33,934
  34,783
  35,652
Total operating expenses, $m
  83,325
  97,278
  112,211
  128,555
  146,289
  165,386
  185,816
  207,549
  230,554
  254,806
  280,283
  306,644
  334,535
  363,631
  393,937
  425,475
  458,265
  492,343
  527,750
  564,533
  602,752
  642,467
  683,752
  726,682
  771,343
  817,825
  866,227
  916,652
  969,209
  1,024,017
  1,081,197
Operating income, $m
  1,405
  4,144
  7,699
  11,629
  15,927
  20,586
  25,597
  30,951
  36,640
  42,656
  48,993
  55,973
  62,940
  70,220
  77,816
  85,732
  93,974
  102,550
  111,472
  120,753
  130,408
  140,453
  150,907
  161,792
  173,131
  184,946
  197,266
  210,117
  223,529
  237,535
  252,167
EBITDA, $m
  2,573
  5,684
  9,461
  13,633
  18,195
  23,138
  28,453
  34,131
  40,163
  46,541
  53,258
  60,310
  67,694
  75,410
  83,459
  91,847
  100,579
  109,666
  119,119
  128,950
  139,178
  149,818
  160,891
  172,420
  184,428
  196,941
  209,987
  223,595
  237,797
  252,625
  268,116
Interest expense (income), $m
  311
  336
  534
  754
  994
  1,256
  1,538
  1,840
  2,161
  2,502
  2,861
  3,239
  3,634
  4,048
  4,480
  4,930
  5,398
  5,885
  6,391
  6,917
  7,464
  8,032
  8,623
  9,237
  9,876
  10,540
  11,232
  11,953
  12,704
  13,487
  14,304
Earnings before tax, $m
  2,191
  3,808
  7,165
  10,875
  14,933
  19,330
  24,059
  29,112
  34,479
  40,154
  46,131
  52,734
  59,305
  66,172
  73,336
  80,802
  88,576
  96,665
  105,081
  113,836
  122,943
  132,420
  142,284
  152,555
  163,255
  174,406
  186,033
  198,164
  210,825
  224,048
  237,863
Tax expense, $m
  547
  1,028
  1,935
  2,936
  4,032
  5,219
  6,496
  7,860
  9,309
  10,842
  12,455
  14,238
  16,012
  17,866
  19,801
  21,817
  23,915
  26,100
  28,372
  30,736
  33,195
  35,753
  38,417
  41,190
  44,079
  47,090
  50,229
  53,504
  56,923
  60,493
  64,223
Net income, $m
  1,555
  2,780
  5,230
  7,939
  10,901
  14,111
  17,563
  21,251
  25,170
  29,312
  33,676
  38,496
  43,293
  48,305
  53,535
  58,986
  64,660
  70,566
  76,709
  83,100
  89,749
  96,667
  103,868
  111,365
  119,176
  127,316
  135,804
  144,659
  153,902
  163,555
  173,640

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,711
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  51,653
  58,591
  69,273
  80,985
  93,712
  107,436
  122,134
  137,782
  154,358
  171,844
  190,223
  209,484
  229,621
  250,636
  272,533
  295,324
  319,029
  343,670
  369,279
  395,891
  423,547
  452,293
  482,183
  513,272
  545,623
  579,302
  614,381
  650,935
  689,046
  728,799
  770,285
Adjusted assets (=assets-cash), $m
  48,942
  58,591
  69,273
  80,985
  93,712
  107,436
  122,134
  137,782
  154,358
  171,844
  190,223
  209,484
  229,621
  250,636
  272,533
  295,324
  319,029
  343,670
  369,279
  395,891
  423,547
  452,293
  482,183
  513,272
  545,623
  579,302
  614,381
  650,935
  689,046
  728,799
  770,285
Revenue / Adjusted assets
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
  1.731
Average production assets, $m
  21,185
  25,355
  29,978
  35,046
  40,554
  46,493
  52,853
  59,625
  66,799
  74,365
  82,319
  90,654
  99,369
  108,463
  117,938
  127,802
  138,060
  148,723
  159,805
  171,322
  183,290
  195,730
  208,665
  222,119
  236,118
  250,693
  265,873
  281,692
  298,185
  315,388
  333,341
Working capital, $m
  3,217
  1,217
  1,439
  1,682
  1,947
  2,232
  2,537
  2,862
  3,206
  3,570
  3,951
  4,351
  4,770
  5,206
  5,661
  6,134
  6,627
  7,139
  7,671
  8,223
  8,798
  9,395
  10,016
  10,662
  11,334
  12,033
  12,762
  13,521
  14,313
  15,139
  16,000
Total debt, $m
  10,138
  15,268
  21,538
  28,413
  35,884
  43,940
  52,568
  61,753
  71,483
  81,747
  92,536
  103,842
  115,663
  127,998
  140,852
  154,230
  168,145
  182,609
  197,642
  213,263
  229,497
  246,371
  263,916
  282,166
  301,156
  320,925
  341,516
  362,974
  385,345
  408,680
  433,032
Total liabilities, $m
  29,263
  34,393
  40,663
  47,538
  55,009
  63,065
  71,693
  80,878
  90,608
  100,872
  111,661
  122,967
  134,788
  147,123
  159,977
  173,355
  187,270
  201,734
  216,767
  232,388
  248,622
  265,496
  283,041
  301,291
  320,281
  340,050
  360,641
  382,099
  404,470
  427,805
  452,157
Total equity, $m
  22,390
  24,198
  28,610
  33,447
  38,703
  44,371
  50,441
  56,904
  63,750
  70,971
  78,562
  86,517
  94,834
  103,513
  112,556
  121,969
  131,759
  141,936
  152,512
  163,503
  174,925
  186,797
  199,142
  211,982
  225,342
  239,252
  253,739
  268,836
  284,576
  300,994
  318,128
Total liabilities and equity, $m
  51,653
  58,591
  69,273
  80,985
  93,712
  107,436
  122,134
  137,782
  154,358
  171,843
  190,223
  209,484
  229,622
  250,636
  272,533
  295,324
  319,029
  343,670
  369,279
  395,891
  423,547
  452,293
  482,183
  513,273
  545,623
  579,302
  614,380
  650,935
  689,046
  728,799
  770,285
Debt-to-equity ratio
  0.453
  0.630
  0.750
  0.850
  0.930
  0.990
  1.040
  1.090
  1.120
  1.150
  1.180
  1.200
  1.220
  1.240
  1.250
  1.260
  1.280
  1.290
  1.300
  1.300
  1.310
  1.320
  1.330
  1.330
  1.340
  1.340
  1.350
  1.350
  1.350
  1.360
  1.360
Adjusted equity ratio
  0.402
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413
  0.413

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,555
  2,780
  5,230
  7,939
  10,901
  14,111
  17,563
  21,251
  25,170
  29,312
  33,676
  38,496
  43,293
  48,305
  53,535
  58,986
  64,660
  70,566
  76,709
  83,100
  89,749
  96,667
  103,868
  111,365
  119,176
  127,316
  135,804
  144,659
  153,902
  163,555
  173,640
Depreciation, amort., depletion, $m
  1,168
  1,540
  1,761
  2,004
  2,267
  2,552
  2,856
  3,180
  3,523
  3,885
  4,266
  4,338
  4,754
  5,190
  5,643
  6,115
  6,606
  7,116
  7,646
  8,197
  8,770
  9,365
  9,984
  10,628
  11,298
  11,995
  12,721
  13,478
  14,267
  15,090
  15,949
Funds from operations, $m
  3,464
  4,320
  6,992
  9,943
  13,168
  16,663
  20,419
  24,431
  28,693
  33,198
  37,942
  42,833
  48,047
  53,495
  59,178
  65,100
  71,266
  77,682
  84,355
  91,297
  98,519
  106,032
  113,852
  121,993
  130,473
  139,311
  148,525
  158,138
  168,170
  178,645
  189,589
Change in working capital, $m
  501
  200
  222
  243
  264
  285
  305
  325
  344
  363
  382
  400
  418
  437
  455
  473
  492
  512
  532
  553
  574
  597
  621
  646
  672
  700
  729
  759
  792
  826
  862
Cash from operations, $m
  2,963
  4,120
  6,770
  9,700
  12,904
  16,378
  20,114
  24,106
  28,348
  32,834
  37,560
  42,433
  47,629
  53,059
  58,724
  64,627
  70,774
  77,170
  83,823
  90,745
  97,944
  105,435
  113,231
  121,347
  129,802
  138,611
  147,797
  157,378
  167,378
  177,819
  188,727
Maintenance CAPEX, $m
  0
  -1,014
  -1,213
  -1,434
  -1,677
  -1,940
  -2,225
  -2,529
  -2,853
  -3,196
  -3,558
  -3,939
  -4,338
  -4,754
  -5,190
  -5,643
  -6,115
  -6,606
  -7,116
  -7,646
  -8,197
  -8,770
  -9,365
  -9,984
  -10,628
  -11,298
  -11,995
  -12,721
  -13,478
  -14,267
  -15,090
New CAPEX, $m
  -2,844
  -4,170
  -4,622
  -5,068
  -5,508
  -5,939
  -6,360
  -6,772
  -7,173
  -7,567
  -7,953
  -8,335
  -8,715
  -9,094
  -9,476
  -9,863
  -10,258
  -10,664
  -11,082
  -11,516
  -11,968
  -12,440
  -12,935
  -13,454
  -14,000
  -14,575
  -15,180
  -15,819
  -16,493
  -17,203
  -17,953
Cash from investing activities, $m
  -3,158
  -5,184
  -5,835
  -6,502
  -7,185
  -7,879
  -8,585
  -9,301
  -10,026
  -10,763
  -11,511
  -12,274
  -13,053
  -13,848
  -14,666
  -15,506
  -16,373
  -17,270
  -18,198
  -19,162
  -20,165
  -21,210
  -22,300
  -23,438
  -24,628
  -25,873
  -27,175
  -28,540
  -29,971
  -31,470
  -33,043
Free cash flow, $m
  -195
  -1,064
  934
  3,197
  5,719
  8,498
  11,529
  14,806
  18,322
  22,071
  26,048
  30,159
  34,577
  39,210
  44,058
  49,121
  54,401
  59,900
  65,625
  71,582
  77,779
  84,225
  90,931
  97,909
  105,174
  112,739
  120,622
  128,838
  137,407
  146,349
  155,684
Issuance/(repayment) of debt, $m
  1,257
  5,680
  6,270
  6,875
  7,471
  8,056
  8,627
  9,185
  9,730
  10,264
  10,788
  11,306
  11,821
  12,335
  12,853
  13,379
  13,915
  14,465
  15,032
  15,621
  16,234
  16,874
  17,545
  18,249
  18,990
  19,770
  20,591
  21,457
  22,371
  23,335
  24,352
Issuance/(repurchase) of shares, $m
  -82
  1,189
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,104
  6,869
  6,270
  6,875
  7,471
  8,056
  8,627
  9,185
  9,730
  10,264
  10,788
  11,306
  11,821
  12,335
  12,853
  13,379
  13,915
  14,465
  15,032
  15,621
  16,234
  16,874
  17,545
  18,249
  18,990
  19,770
  20,591
  21,457
  22,371
  23,335
  24,352
Total cash flow (excl. dividends), $m
  919
  5,805
  7,204
  10,072
  13,190
  16,554
  20,156
  23,991
  28,052
  32,335
  36,837
  41,465
  46,398
  51,546
  56,912
  62,500
  68,315
  74,365
  80,658
  87,203
  94,013
  101,099
  108,476
  116,159
  124,164
  132,509
  141,213
  150,296
  159,778
  169,684
  180,036
Retained Cash Flow (-), $m
  710
  -3,969
  -4,411
  -4,837
  -5,257
  -5,668
  -6,070
  -6,463
  -6,846
  -7,222
  -7,590
  -7,955
  -8,317
  -8,679
  -9,043
  -9,413
  -9,790
  -10,177
  -10,576
  -10,991
  -11,422
  -11,872
  -12,344
  -12,840
  -13,361
  -13,909
  -14,487
  -15,097
  -15,740
  -16,418
  -17,134
Prev. year cash balance distribution, $m
 
  2,161
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,997
  2,793
  5,235
  7,934
  10,886
  14,086
  17,528
  21,206
  25,114
  29,246
  33,511
  38,081
  42,867
  47,868
  53,087
  58,525
  64,188
  70,081
  76,213
  82,591
  89,227
  96,132
  103,319
  110,803
  118,600
  126,725
  135,199
  144,039
  153,266
  162,903
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  3,796
  2,506
  4,415
  6,252
  7,967
  9,511
  10,843
  11,928
  12,742
  13,271
  13,477
  13,443
  13,146
  12,615
  11,883
  10,991
  9,982
  8,900
  7,788
  6,687
  5,630
  4,645
  3,754
  2,968
  2,295
  1,734
  1,278
  918
  643
  437
Current shareholders' claim on cash, %
  100
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6
  97.6

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States. The Chemicals segment consists of its equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics. The Refining segment buys, sells and refines crude oil and other feedstocks at refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, such as gasolines, distillates and aviation fuels, primarily in the United States and Europe, as well as includes the manufacturing and marketing of specialty products, and power generation operations.

FINANCIAL RATIOS  of  Phillips 66 (PSX)

Valuation Ratios
P/E Ratio 35.1
Price to Sales 0.6
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 18.4
Price to Free Cash Flow 459
Growth Rates
Sales Growth Rate -14.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50.7%
Cap. Spend. - 3 Yr. Gr. Rate 9.8%
Financial Strength
Quick Ratio 5
Current Ratio 0.1
LT Debt to Equity 42.8%
Total Debt to Equity 45.3%
Interest Coverage 8
Management Effectiveness
Return On Assets 3.6%
Ret/ On Assets - 3 Yr. Avg. 7.6%
Return On Total Capital 4.8%
Ret/ On T. Cap. - 3 Yr. Avg. 11.6%
Return On Equity 6.8%
Return On Equity - 3 Yr. Avg. 15.9%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 26.2%
Gross Margin - 3 Yr. Avg. 22.6%
EBITDA Margin 4.3%
EBITDA Margin - 3 Yr. Avg. 5.4%
Operating Margin 1.7%
Oper. Margin - 3 Yr. Avg. 2.7%
Pre-Tax Margin 2.6%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 1.8%
Net Profit Margin - 3 Yr. Avg. 3%
Effective Tax Rate 25%
Eff/ Tax Rate - 3 Yr. Avg. 27.6%
Payout Ratio 82.4%

PSX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PSX stock intrinsic value calculation we used $84730 million for the last fiscal year's total revenue generated by Phillips 66. The default revenue input number comes from 2016 income statement of Phillips 66. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PSX stock valuation model: a) initial revenue growth rate of 19.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.3%, whose default value for PSX is calculated based on our internal credit rating of Phillips 66, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Phillips 66.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PSX stock the variable cost ratio is equal to 78.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $16997 million in the base year in the intrinsic value calculation for PSX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Phillips 66.

Corporate tax rate of 27% is the nominal tax rate for Phillips 66. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PSX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PSX are equal to 25%.

Life of production assets of 20.9 years is the average useful life of capital assets used in Phillips 66 operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PSX is equal to 1.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $22390 million for Phillips 66 - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 510.826 million for Phillips 66 is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Phillips 66 at the current share price and the inputted number of shares is $53.8 billion.

RELATED COMPANIES Price Int.Val. Rating
MPC Marathon Petro 71.49 323.84  str.buy
VLO Valero Energy 96.46 590.30  str.buy
HFC HollyFrontier 50.91 1,071.67  str.buy
PBF PBF Energy 33.91 99.05  str.buy
CLMT Calumet Specia 7.85 1.77  str.sell
ALDW Alon USA Partn 18.74 29.56  str.buy

COMPANY NEWS

▶ These Refining and Marketing Stocks Rose This Week   [Jan-19-18 07:55AM  Market Realist]
▶ How Marathon Petroleum Stock Performed before 4Q17 Earnings   [Jan-18-18 07:34AM  Market Realist]
▶ MPCs Refining Earnings Outlook for 4Q17   [Jan-17-18 05:00PM  Market Realist]
▶ Stocks With Rising Relative Price Strength: Phillips 66   [Jan-16-18 03:00AM  Investor's Business Daily]
▶ MPC, ANDV, VLO, PSX: A Look at Refiners Valuations   [Jan-12-18 09:02AM  Market Realist]
▶ The Move To $80 Oil May Be Quick   [Jan-11-18 06:36PM  Forbes]
▶ Refiners Valuations for MPC, ANDV, VLO, and PSX   [Jan-10-18 10:31AM  Market Realist]
▶ Top 4 Natural Gas Stocks as of January 2018   [Jan-08-18 08:59AM  Investopedia]
▶ 5 Energy Dividend Stocks for Your Portfolio   [Jan-05-18 11:00PM  Motley Fool]
▶ Correlation of Phillips 66 Stock with WTI   [Jan-04-18 07:30AM  Market Realist]
▶ How Phillips 66s Refining Yields Have Trended in 3Q17   [Jan-03-18 10:30AM  Market Realist]
▶ Phillips 66s Capex: Positioning for Growth   [07:30AM  Market Realist]
▶ Oil Markets Start 2018 With A Bang   [Jan-02-18 03:00PM  Oilprice.com]
▶ Will Phillips 66s Cash Flow Improve?   [10:30AM  Market Realist]
▶ Is Phillips 66s Debt Position Improving?   [09:00AM  Market Realist]
▶ Why Enbridge Inc Is a Retiree's Dream Stock   [Dec-31-17 11:34AM  Motley Fool]
▶ Whats the Forecast for Phillips 66 Stock for 1Q18?   [Dec-29-17 10:32AM  Market Realist]
▶ Phillips 66s Moving Averages in 4Q17   [07:36AM  Market Realist]
▶ Is Phillips 66 Stock Outperforming SPY in 4Q17?   [Dec-28-17 05:22PM  Market Realist]
▶ Have MPCs Refining Yields Improved in 3Q17?   [Dec-26-17 10:30AM  Market Realist]
▶ A Look at Marathon Petroleums Cash Flow Position   [Dec-25-17 07:30AM  Market Realist]
▶ Putting Together a Shopping List for Saudi Aramco   [Dec-22-17 09:00AM  TheStreet.com]
▶ Chevron Phillips finishes another part of $6B Gulf Coast petrochemical project   [Dec-21-17 02:00PM  American City Business Journals]
▶ Marathon Petroleums Moving Averages: What Do They Indicate?   [Dec-20-17 04:40PM  Market Realist]
▶ Refining and Marketing Gainers: HFC, CVRR, PBF, INT, and PSX   [Dec-14-17 12:55PM  Market Realist]
▶ Refining Stocks Dividend Yields: Ranking the Big 7   [Dec-13-17 12:21PM  Market Realist]
▶ What Andeavors PEG Ratio Indicates   [07:30AM  Market Realist]
▶ How Andeavors Valuations Compare to Its Peers   [Dec-12-17 10:30AM  Market Realist]
▶ 5 Energy Dividend Stocks You Can Buy Right Now   [Dec-11-17 08:45PM  Motley Fool]
▶ Phillips 66, Enbridge partner on Texas pipeline   [01:35PM  American City Business Journals]
▶ Phillips 66 Announces 2018 Capital Program   [Dec-08-17 11:57AM  Business Wire]
▶ Andeavor Stocks Performance in 4Q17 So Far   [10:30AM  Market Realist]
▶ Why 2017 Was a Year to Remember for Phillips 66   [Dec-06-17 02:06PM  Motley Fool]
▶ Have Investors Already Priced In Phillips 66s (PSX) Growth?   [Nov-29-17 02:27PM  Simply Wall St.]
▶ This Top Warren Buffett Stock May Break Out Soon   [Nov-24-17 01:11PM  Investor's Business Daily]
▶ WTI Prices Surge On Keystone Spill   [Nov-23-17 06:00PM  Oilprice.com]
▶ 3 Stocks for Warren Buffett Fans   [Nov-22-17 09:41PM  Motley Fool]
▶ Comparing Valeros Valuation   [07:30AM  Market Realist]
▶ How Do Refiners Valuations Stack Up?   [Nov-21-17 07:30AM  Market Realist]
▶ How Refining Stocks Performed in 4Q17   [10:30AM  Market Realist]
▶ Could Valeros Ethanol Earnings Fall in 4Q17?   [Nov-16-17 03:05PM  Market Realist]
Financial statements of PSX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.