Is Phillips 66 overvalued or undervalued?

As of 17 October 2025, the valuation grade for Phillips 66 has moved from very expensive to expensive, indicating a shift in perception regarding its valuation. The company appears to be overvalued, with a P/E ratio of 43, significantly higher than its peer Marathon Petroleum Corp., which has a P/E of 32.03, and Valero Energy Corp. at 45.76. Additionally, Phillips 66's EV to EBITDA stands at 28.87, while Marathon Petroleum's is notably lower at 19.19, further highlighting the premium at which Phillips 66 is trading.
In comparison to the S&P 500, Phillips 66 has shown a mixed performance, with a year-to-date return of 13.46%, slightly outperforming the index's 13.30%, but a one-year return of -3.06% contrasts sharply with the S&P 500's 14.08%. This divergence in returns reinforces the notion that Phillips 66 may be overvalued relative to its peers and the broader market.