Phillips 66 2Q26 Flash-ALERT

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

Phillips 66

2Q26 Flash-ALERT

Overweight

PSX, PSX US

Price (04 Aug 26):$205.89

Oil & Gas Exploration & Production

JPM View: Stock Reaction – Positive. PSX reported a strong 2Q beat, with

adjusted EPS of $9.41 well above JPMe/STe both at $7.59. The key story in the

quarter was the significant deleveraging success, with ending net debt of $16.5 B

already below the company’s $17 B total debt target by YE27. Adjusted EBITDA

of $5,891 MM was also well ahead of JPMe at $4,881 MM and the STe at $4,983

MM. Refining was the largest driver of the beat, with Midstream, Chemicals,

M&S, and RD all ahead of our estimates, while Corporate came in better than

modeled. Refining beat on higher utilization and higher capture. CFO before WC

changes of $4,317 MM was ahead of JPMe at $3,592 MM and the STe at $3,733

MM. PSX reported share buybacks of $379 MM, which was above our $375 MM

estimate.

Arun Jayaram AC

(1-212) 622-8541

Kartikey H Pandey

(1-212) 622-5006

J.P. Morgan Securities LLC

Refining beat our model by 84c, M&S beat by 30c, Midstream beat by 19c,

Chemicals beat by 3c, RD beat by 56c, and corp beat by 8c. Below the line, tax rate

and NCI were a combined 15c headwind. Refining worldwide realized margin was

$24.08/bbl (JPMe $23.05/bbl), while opex was $5.47/bbl (JPMe $5.44/bbl).

Utilization was ~96% (JPMe ~95%, STe 94%, and guidance of low-to-mid 90%s)

on throughput of 1,919 Mb/d. Throughput beat our model in the Atlantic Basin and

Gulf Coast, while the Western/Pacific missed our estimate. Gross margins/bbl beat

our model in the Gulf Coast, Central Corridor, and West Coast, while the Atlantic

Basin missed. M&S beat on sales volumes, though US and International fuel

margins were below our model. Midstream volumes beat our model in both

transportation and NGL ops. CFPS (pre-WC changes) of $10.72 was ahead of

JPMe at $8.94 and the STe at $9.27. Cash capex of $726 MM was higher than

JPMe/STe at $593 MM/$600 MM. PSX ended the quarter with $16.5 B of net debt,

which compares to our model at $20.1 B.

Forward Guidance. For 3Q 2026, PSX guided to Refining crude utilization

…