Phillips 66 (R66.DE) Stock Analysis & Winston Score

Phillips 66 takes crude oil and turns it into useful products like gasoline, diesel, jet fuel, and chemicals. It sells these products to other businesses, fuel retailers, and industrial customers across the United States and internationally. The company also owns pipelines and storage facilities through its midstream business, and it has a chemicals joint venture called CPChem that makes plastics and other materials. Phillips 66 earns most of its money from refining — buying crude oil and selling the finished products at a higher price — though its midstream and chemicals segments provide more stable, fee-based income. The company operates primarily in the U.S. but has refining and marketing assets in Europe as well, with annual revenues in the tens of billions of dollars. Its network of pipelines and terminals creates some switching costs, but refining is a low-margin, commodity-driven business, and profitability is heavily tied to the spread between crude oil prices and refined product prices, known as the crack spread.