Activist Investor Elliott Buys $1-Billion Stake in U.S. Refiner Phillips 66

Elliott Funding Administration, an activist funding group, said on Wednesday it had gathered a $1-billion stake in surely one of the foremost excellent U.S. refiners, Phillips 66, and expressed dissatisfaction with the company’s underperformance in most up to date years.   

Moreover disclosing its $1 billion funding in Phillips 66, the activist funding firm despatched a letter to the Board of Directors of Phillips 66, wherein it outlined its options of how the refiner could well well presumably procure trust with traders and free up foremost and sustainable mark for its shareholders.

“Elliott sees approximately 75% upside to basically the most up to date stock mark,” the activist investor said today, sending the stock mark of Phillips 66 (NYSE: PSX) up by 5% in pre-market alternate in Original York.

Per Elliott, Phillips 66’s performance has declined in most up to date years “because it has shifted its focus a ways flung from its Refining section.”

“As a result, operational execution has suffered, and the Firm used to be poorly positioned to clutch earnings of the refining huge-cycle in 2022 and 2023,” Elliott said within the letter.

For the duration of the identical length, Phillips 66 pals resembling Marathon Petroleum and Valero Vitality “had been seriously better ready,” according to the activist investor.

Phillips 66’s refining operating fees per barrel beget elevated the outlet with the identical metric at Valero, undermining self belief among Phillips 66 traders that the company has the flexibility to speed its refining operations successfully, Elliott said.

“At most up to date, we beget Mr. Lashier and the the rest of the administration group deserve investor toughen as lengthy as they repeat meaningful growth in opposition to those targets,” the investor wrote.

Phillips 66 missed analyst expectations for the third-quarter earnings, despite stronger refining margins when put next with the 2nd quarter.

To compare, for the identical quarter, Valero Vitality, the 2nd-excellent U.S. refiner by means, booked elevated-than-expected earnings amid persisted solid product query within the United States.  

By Charles Kennedy for Oilprice.com

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