Is Phillips 66 overvalued or undervalued?

As of 22 May 2025, the valuation grade for Phillips 66 has moved from expensive to fair, indicating a more favorable assessment of the company's value. The company is currently fairly valued based on its financial metrics. Key ratios include a P/E ratio of 43, a Price to Book Value of 2.59, and an EV to EBITDA of 28.87, which suggest that while the company has a high earnings multiple, it is more aligned with its peers than previously thought.
In comparison to its peers, Marathon Petroleum Corp. has a P/E ratio of 27.23 and an EV to EBITDA of 17.63, while Valero Energy Corp. is considered expensive with a P/E of 36.76. This positions Phillips 66 competitively within the industry, as it now aligns more closely with the average valuation metrics of its peers. Notably, despite a recent decline in stock price, the company has shown a year-to-date return of 6.23%, outperforming the S&P 500's 2.44% return during the same period, reinforcing its fair valuation status.