Energy Giant Trims Forecast Following Severe Winter Storms

Year-over-year, the security is still up over 43%

Digital Content Manager
Apr 6, 2021 at 10:55 AM
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The shares of Phillips 66 (NYSE:PSX) are up 0.7% at $82.62 this morning, despite the company announcing it expects to report first-quarter losses of $550 to $700 million. The energy name noted severe winter storms negatively impacted operations in the Central and Gulf Coast regions, resulting in higher utility, maintenance and repair costs. Plus, Covid-19 is still lowering demand for refined petroleum products. 

On the charts, Phillips 66 stock has nearly doubled off its October lows to hit a March 9, annual high of $90.59. And though the security has since cooled off from that peak, the supportive 40-day moving average has contained its latest pullback. Longer term, PSX sports a 43.5% year-over-year lead.

Analysts are optimistic towards the equity, with eight of the 11 in question calling PSX a "buy" or better, while the remaining three carry a tepid "hold" rating. Plus, the stock's 12-month consensus target price of $91.33 is a 10.9% premium to its current perch.  

The options pits are firmly in the bullish camp, too. This is per PSX's 50-day call/put volume ratio of 6.51 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 99th percentile of its annual range. This means long calls are getting picked up at a much faster-than-usual clip. 

Lastly, now looks like an affordable time to buy PSX options. The stock's Schaeffer's Volatility Index (SVI) of 35% sits in the extremely low 7th percentile of the past 12 months. In other words, the equity sports attractively priced premiums right now.

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