Phillips 66 Stock Drop Looks Sharp, But How Deep Can It Go?
Phillips 66 (PSX) stock is down 6.9% in a day. The recent slide reflects renewed concerns around its higher 2026 capital budget and falling crude oil prices, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Phillips 66 stands today.
- Size: Phillips 66 is a $53 Bil company with $132 Bil in revenue currently trading at $131.78.
- Fundamentals: Last 12 month revenue growth of -10.7% and operating margin of 1.3%.
- Liquidity: Has Debt to Equity ratio of 0.4 and Cash to Assets ratio of 0.02
- Valuation: Phillips 66 stock is currently trading at P/E multiple of 36.6 and P/EBIT multiple of 18.6
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 34.7% within a year. See PSX Dip Buy Analysis.
These metrics point to a Very Weak operational performance, alongside High valuation – making the stock Very Unattractive. For details, see Buy or Sell PSX Stock
That brings us to the key consideration for investors worried about this fall: how resilient is PSX stock if markets turn south? This is where our downturn resilience framework comes in. Suppose PSX stock falls another 20-30% to $92 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- PSX stock fell 32.7% from a high of $110.25 on 8 June 2022 to $74.16 on 26 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 November 2022
- Since then, the stock increased to a high of $172.71 on 3 April 2024 , and currently trades at $131.78
| PSX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -32.7% | -25.4% |
| Time to Full Recovery | 46 days | 464 days |
2020 Covid Pandemic
- PSX stock fell 62.5% from a high of $112.20 on 2 January 2020 to $42.09 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 November 2022
| PSX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -62.5% | -33.9% |
| Time to Full Recovery | 974 days | 148 days |
2018 Correction
- PSX stock fell 36.4% from a high of $123.34 on 31 July 2018 to $78.50 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 September 2023
| PSX | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -36.4% | -19.8% |
| Time to Full Recovery | 1723 days | 120 days |
Feeling jittery about PSX stock? Consider portfolio approach.
Stock Picking Falls Short Against Multi Asset Portfolios
Individual picks are volatile but diversified assets offset each other. A multi asset portfolio helps you stay the course capture upside and reduce downside.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices