Phillips 66 swung to an adjusted profit in the first quarter of 2026, but a sharp rise in leverage is dividing analyst opinion even as operating metrics improve. The company reported adjusted earnings of $0.49 per share, beating the consensus forecast of a $0.40 loss, driven by a 48% jump in realized refining margins to $10.11 per barrel and a utilization rate that climbed to 95%. However, total debt reached $27.1 billion, pushing the debt-to-capital ratio to 48% from 39% in the prior quarter, partly due to $3 billion in cash collateral outflows tied to hedging derivatives. Management is targeting $17 billion in debt by early 2027, but the balance sheet strain leaves little room for operational setbacks. The stock trades at roughly 11 times forward earnings, a discount to Valero’s 14.01 times and the peer average of 16.5 times, yet nearly on par with Marathon Petroleum’s 11.97 times despite Marathon generating higher per-barrel margins.
Phillips 66Phillips 66 beat Q1 earnings consensus with adjusted profit of $0.49 per share vs expected loss of $0.40.
Marathon Petroleum Corp
Valero Energy Corporation