Quantcast

Will Phillips 66 (PSX) Beat Estimates Again in Its Next Earnings Report?


Shutterstock photo

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Phillips 66 (PSX), which belongs to the Zacks Oil and Gas - Refining and Marketing industry.

When looking at the last two reports, this oil refiner has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 50.22%, on average, in the last two quarters.

For the las t report ed quarter, Phillips 66 came out with earnings of $4.87 per share versus the Zacks Consensus Estimate of $2.76 per share, representing a surprise of 76.45%. For the previous quarter, the company was expected to pos t earnings of $2.50 per share and it actually produced earnings of $3.10 per share, delivering a surprise of 24%.

Price and EPS Surprise

Thanks in part to this history, there has been a favorable change in earnings estimates for Phillips 66 lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time . In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Phillips 66 currently has an Earnings ESP of +0.99%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's nex t earnings report to be released on April 30, 2019.

When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.

Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Phillips 66 (PSX): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Earnings , Investing Ideas , Stocks
Referenced Symbols: PSX



More from Zacks.com

Subscribe







Zacks.com
Contributor:

Zacks.com

Equity Research












Research Brokers before you trade

Want to trade FX?