Is Phillips 66 overvalued or undervalued?

As of 17 October 2025, Phillips 66's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. The company appears overvalued based on its current metrics, with a P/E ratio of 43, a Price to Book Value of 2.59, and an EV to EBITDA of 28.87. In comparison, Marathon Petroleum Corp. has a more favorable P/E of 32.03, while Valero Energy Corp. also shows a high P/E of 45.76, reinforcing the notion that Phillips 66 is trading at a premium relative to some peers.
Despite a strong dividend yield of 292.58%, the company's return metrics over various periods suggest underperformance against the S&P 500, particularly over the past year where it returned -3.06% compared to the S&P 500's 14.08%. This trend, alongside its high valuation ratios, supports the conclusion that Phillips 66 is overvalued in the current market context.