CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target remains $130, on an 8.1x multiple of projected 2024 operating cash flows, below PSX’s historical average. We believe a discount is merited due to our negative outlook for refining in 2024. We downgrade based on valuation, as PSX’s shares have grown 44% in the last 12 months, compared to the S&P 1500 Oil & Gas Refining & Marketing Index (+22%) and its peer average (+11%). We cut our 2024 EPS view by $1.60 to $12.26 and start 2025 at $12.60. Q4 EPS of $3.09 vs. $4.00 beat consensus by $0.71. Refining margins ($14.41/b) fell 27% Y/Y due to lower crack spreads. PSX expects 2024 capex to be in range of $2.2B (vs. $2.4B in 2023). We estimate PSX with free cash flow in range of $3.8B in 2024 (vs. $4.6B in 2023). PSX reaffirmed its goal of growing mid-cycle EBITDA by 40% to $14B by 2025; however, given that OPEC+ production cuts could last until 2025, and with the EIA predicting refined product demand to remain flat in 2024-2025, we think PSX could face headwinds in meeting its 2025 EBITDA goal.