Downgrade Pushes Oil Stock Further From Highs

BofA Global Research downgraded PSX to "neutral" in a "strategic pause"

Deputy Editor
Aug 15, 2023 at 10:31 AM
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Oil & gas stock Phillips 66 (NYSE:PSX) is continuing to slide from its Aug. 11 three-year peak of $117.29, after a downgrade from BoFA Global Research to "neutral" from "buy." The firm cited a "strategic pause," though it lifted its price target to $141 from $132 in the process. It's worth noting that the company's ex-dividend day is coming up on Aug. 17 as well.

PSX is on track to snap seven-straight weeks of gains, and yesterday broke a seven-day win streak as it fell from Friday's highs. The equity is above all notable short- and long-term moving averages, including its 20-day trendline, which has helped guide the shares higher over the past month.

At last glance, the equity was down 0.8% at $113.73, and was earlier as low as $112.48. Year-to-date, the stock is carrying a 9.2% lead. Of the 19 analysts in coverage, 11 now carry a "buy" or better rating, while the 12-month consensus price target of $126.14 is a 10.6% premium to current levels. In other words, should this bullish sentiment unwind, it could send PSX even lower.

Meanwhile, now looks like a good time to weigh in with options, as premiums are well-priced. Phillips 66 stock's Schaeffer's Volatility Index (SVI) of 26% ranks in the 8th percentile of its annual range, meaning the security options traders are pricing in low volatility expectations at the moment. 


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