Phillips 66's Q4 Earnings on Deck: Should You Stay Invested or Exit?

Phillips 66 PSX is set to report fourth-quarter 2025 results on Feb. 4, 2026, before the opening bell.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.11 per share, implying a massive improvement from the year-ago reported number. It has witnessed two downward estimate movements in the past seven days. The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $30.2 billion, suggesting a 11.3% fall from the year-ago actuals.

PSX beat the consensus estimate for earnings in three of the trailing four quarters and missed once, with the average surprise being 18.3%. This is depicted in the graph below:  

Q4 Earnings Whispers for PSX

Our proven model predicts an earnings beat for PSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is just the case here.

The leading refiner has an Earnings ESP of +0.88% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PSX’s Factors to Note

To have an idea of how oil prices behaved in the December quarter last, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK WTI spot prices for October, November and December of 2025 were $60.89 per barrel, $60.06 per barrel and $57.97 per barrel, respectively. Commodity prices were $71.99 per barrel, $69.95 per barrel and $70.12 per barrel, respectively, in October, November and December of 2024, per EIA. Investors should note that the weakness in the crude pricing environment is likely to have aided PSX’s bottom line in the fourth quarter.

PSX’s Price Performance & Valuation

PSX's stock has jumped 21.8% over the past year, almost in line with the industry’s 21.9% improvement. Marathon Petroleum Corp. MPC, another refining player, has surged 19.9% over the same time frame, while Valero Energy Corporation VLO, in the same space, has gained 33.2%.

One-Year Price Chart

Despite the prices of VLO and the industry outperforming it, PSX appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) ratio is 14.68, reflecting that it is trading at a premium compared with the industry average of 4.77.

Investment Thesis of PSX

With West Texas Intermediate (WTI) oil prices currently hovering around $61 per barrel, according to data from Oilprice.com, which is significantly lower than a year ago, the overall energy business is now uncertain. However, unlike many other energy players, Phillips 66 is likely to gain from the ongoing crude pricing environment.

This is because Phillips 66 is a leading refining company. Hence, it is able to purchase oil at a lower cost, enabling the production of end products. Additionally, crude prices are likely to remain soft in the coming days, as the U.S. Energy Information Administration (“EIA”) expects global oil inventories to continue increasing. 

EIA projects the spot average West Texas Intermediate price for 2026 at $52.21 per barrel, lower than $65.40 per barrel for 2025. Thus, Phillips 66, which generates significant margin from its refining activities, is likely to benefit from soft oil prices.

Status of Other Refining Players: VLO, MPC

Valero Energy reported fourth-quarter 2025 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.22. The bottom line improved from the year-ago quarter’s level of 64 cents per share.

MPC will report fourth-quarter 2025 earnings on Feb. 3. MPC currently has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell).

Last Word

Considering the backdrop, it might be wise for investors to wait for a more favorable entry point, as the company is currently overvalued. Those who own PSX stock may hold on to it to benefit from its long-term growth prospects.

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This article originally published on Zacks Investment Research (zacks.com).

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