Piper Sandler Maintains Neutral Stance on Phillips 66 Following Permian Basin Field Visit

Piper Sandler analysts returned from a recent field visit to the Permian Basin with a neutral view on Phillips 66 (PSX), maintaining the firm’s existing rating. The trip included detailed examinations of core assets such as the company’s 75,000 barrels per day (bpd) refining capacity in West Texas and the active crude production footprint across the Delaware and Midland sub-basins. The firm noted that Phillips 66 reported fourth-quarter 2025 production volumes of approximately 160,000 bpd from its Permian assets, indicating steady output despite incremental maintenance activity. Capital expenditures in the region were held to $420 million during the period, in line with the company's 2025 guidance of $1.8 billion for upstream capital spending. The company also reported a 7% year-over-year increase in crude oil throughput at its Sweeny, Texas, refinery, reaching 420,000 bpd. Despite these operational strengths, Piper Sandler highlighted ongoing challenges, including plateauing crude differentials and competitive pressure from other regional producers. The analysts noted that PSX’s downstream margins averaged $8.10 per barrel in Q4, slightly below the sector median of $8.50, which contributed to the neutral stance. The rating change has minimal near-term impact on the stock, which traded at $124.35 on December 8, 2025, with a forward P/E of 11.2. The neutral call affects a wide investor base, including institutional holders with significant exposure to energy infrastructure and integrated refiners.