Phillips 66: Looking for significant and broad-based q/q recovery

Research evidence excerpt

Phillips 66: Looking for significant and broad-based q/q recovery

Equity Research

North America Midstream and Refining

8 July 2026

Phillips 66

Looking for significant and broad-

based q/q recovery

Both Refining and Chem margins were highly supportive in PSX EQUAL WEIGHT

2Q, with the path forward largely dependent on the pace of Unchanged

North America Midstream

global utilization recovery amid the current interim peace. and Refining NEUTRAL

Unchanged

Midstream fundamentals remain constructive, with Price Target USD 183.00

raised 3% from USD 177.00incremental Permian NGL infrastructure investment driving

LT growth. Price (07-Jul-26) USD 178.84

Potential Upside/Downside +2.3%

Source: Bloomberg, Barclays Research

• Refining macro set up likely to remain favorable though summer, even if the current

interim peace deal holds and activity though the Strait of Hormuz normalizes. With Market Cap (USD mn) 71703

significant ME refining capacity damaged and/or offline, coupled with ongoing Ukrainian Shares Outstanding (mn) 400.94

attacks on Russian refining infrastructure, it will take time for currently depleted product Free Float (%) 99.76

inventories to rebuild. 52 Wk Avg Daily Volume (mn) 2.6

Dividend Yield (%) 2.84

That said, the pace of incremental Chinese RP exports will be a key variable in driving global

Return on Equity TTM (%) 14.76

crack spreads, with early July data from Kpler suggesting relatively subdued volumes of 460

Current BVPS (USD) 71.15

kbpd vs 1Q26 average of 722 kbpd. Looking ahead to winter, we expect attention will turn to Source: Bloomberg

whether distillate demand can withstand weather-related uncertainties associated with a

potential “Super El Niño”. We also wait to see how quickly global refining utilization increases

Price Performance Exchange-NYSE