A week ago, Phillips 66 (NYSE:PSX) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 18% higher than the analysts had forecast, at US$52b, while EPS were US$9.55 beating analyst models by 24%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

After the latest results, the 15 analysts covering Phillips 66 are now predicting revenues of US$163.2b in 2026. If met, this would reflect a credible 7.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 34% to US$23.82. In the lead-up to this report, the analysts had been modelling revenues of US$154.8b and earnings per share (EPS) of US$22.57 in 2026. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of US$214, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Phillips 66 analyst has a price target of US$255 per share, while the most pessimistic values it at US$138. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Phillips 66 shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Phillips 66's growth to accelerate, with the forecast 15% annualised growth to the end of 2026 ranking favourably alongside historical growth of 3.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Phillips 66 to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Phillips 66's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$214, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Phillips 66. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Phillips 66 analysts - going out to 2028, and you can see them free on our platform here.

You should always think about risks though.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.