DCF Studio

    PSX · NYQ · Energy

    Phillips 66

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 90.44

    Market price

    USD 275.04

    Implied upside

    -67.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 90.44-67.1%
    Exit multiple
    USD 184.48-32.9%
    Market price
    USD 275.04

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn5bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 168.6bnUSD 155.8bnUSD 145.9bnUSD 138.5bnUSD 133.2bnUSD 129.8bnUSD 128.1bnUSD 128.1bnUSD 129.6bnUSD 132.9bn-2.6%
    EBITUSD 6.3bnUSD 5.8bnUSD 5.4bnUSD 5.1bnUSD 4.9bnUSD 4.8bnUSD 4.7bnUSD 4.7bnUSD 4.8bnUSD 4.9bn-2.6%
    NOPATUSD 5.0bnUSD 4.6bnUSD 4.3bnUSD 4.1bnUSD 3.9bnUSD 3.8bnUSD 3.8bnUSD 3.8bnUSD 3.8bnUSD 3.9bn-2.6%
    Add depreciation & amortisationUSD 2.7bnUSD 2.5bnUSD 2.3bnUSD 2.2bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bn-2.6%
    Less capital expenditureUSD -2.3bnUSD -2.3bnUSD -2.4bnUSD -2.4bnUSD -2.5bnUSD -2.5bnUSD -2.7bnUSD -2.8bnUSD -3.0bnUSD -3.2bn+3.5%
    Capex, % of revenue1.4%1.5%1.6%1.7%1.8%2.0%2.1%2.2%2.3%2.4%-
    Less increase in working capitalUSD -1.2bnUSD 411.4mUSD 316.9mUSD 237.7mUSD 169.5mUSD 109.1mUSD 53.8mUSD 1.2mUSD -50.7mUSD -103.8m-23.5%
    Free cashflow to firmUSD 4.2bnUSD 5.2bnUSD 4.6bnUSD 4.1bnUSD 3.8bnUSD 3.5bnUSD 3.2bnUSD 3.0bnUSD 2.9bnUSD 2.7bn-4.6%
    Discount factor0.96390.89550.83200.77290.71810.66710.61980.57580.53500.4970-
    Present valueUSD 4.0bnUSD 4.6bnUSD 3.8bnUSD 3.2bnUSD 2.7bnUSD 2.3bnUSD 2.0bnUSD 1.7bnUSD 1.5bnUSD 1.4bn-
    Present Value Of The ForecastUSD 27.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.780Reported 0.672, pulled toward 1.0 (Blume)
    Cost of equity8.19%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 3.1x interest cover. Book interest / average debt was lower, at 5.5%.
    Market capitalisationUSD 107.3bn84.5% of capital
    Total debtUSD 19.7bn15.5% of capital, book value as a proxy
    Tax rate20.4%Effective, capped at statutory
    WACC7.64%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 90.44

    51% of EV

    Forecast FCFF, final year
    USD 2.7bn
    Capex at depreciation, working capital in reinvestment
    USD 3.9bn
    Less reinvestment at g/ROIC (27.5% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 2.8bn
    ROIC (reported)
    9.1%
    Terminal value, undiscounted
    USD 56.7bn
    Terminal value, discounted
    USD 28.2bn
    Enterprise value
    USD 55.5bn
    Less net debt
    USD 18.6bn
    Equity value
    USD 36.9bn

    Exit at 19.0x EBITDA

    Value per shareUSD 184.48

    71% of EV

    Terminal value, undiscounted
    USD 133.9bn
    Terminal value, discounted
    USD 66.5bn
    Enterprise value
    USD 93.9bn
    Less net debt
    USD 18.6bn
    Equity value
    USD 75.3bn

    Spread between methods: 68%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.64%147.09153.18161.70174.02192.82
    6.64%113.39115.11117.59121.15126.29
    7.64%90.5590.3890.4490.8191.59
    8.64%74.0172.9771.9871.0370.16
    9.64%62.1661.0159.8658.7157.56

    Outlined: this model. Green text: above today's price of 275.04. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-8.0%0.0%11.4%
    EBIT margin5.7%3.7%8.8%
    Discount rate-7.6%4.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.