NEW YORK - Elliott Investment Management, a major shareholder in Phillips 66, released findings from a third-party survey indicating significant investor dissatisfaction with the energy company’s performance and strategic direction. The survey, involving shareholders who collectively hold over 60% of Phillips 66’s institutional shares, suggests a consensus among investors that the company’s conglomerate structure is not beneficial and that its strategy lacks clarity. The concerns appear justified, as InvestingPro data shows the stock has declined nearly 37% over the past year, significantly underperforming with a market capitalization of $39.2 billion.
According to the survey results, shareholders ranked Phillips 66 last in comparison to its peers on several fronts, including operational execution, CEO effectiveness, and capital allocation. Investors expressed a desire for Phillips 66 to divest non-core assets to eliminate what they perceive as a "conglomerate discount" and to unlock shareholder value. There was also notable support for the potential sale of the company’s midstream assets and other non-core businesses. Despite these challenges, the company maintains a solid dividend yield of 4.78% and a Fair financial health rating according to InvestingPro metrics.
The survey revealed that shareholders see Phillips 66 as complacent, resulting in significant undervaluation and investor uncertainty. Many investors feel the company is slow in executing necessary changes and that the current board and management lack the drive to enhance shareholder value. Despite these concerns, shareholders acknowledge the substantial potential of Phillips 66, citing its market position and asset quality.
Elliott has proposed a "Streamline 66" plan, aiming to address these issues and improve share price performance, but shareholders doubt the current leadership’s willingness to implement such changes. The investment firm has nominated four candidates to the Phillips 66 Board of Directors, advocating for new expertise and a readiness to pursue bold changes.
The survey, conducted in March 2025, comes as Elliott continues to advocate for strategic adjustments at Phillips 66. Shareholders can vote on the proposed board changes using Elliott’s GOLD proxy card. This news is based on a press release statement by Elliott Investment Management.
In other recent news, Phillips 66 has faced several noteworthy developments. UBS analysts have maintained a Buy rating on Phillips 66 with a price target of $144, despite forecasting a first-quarter loss. The anticipated loss is attributed to increased expenses related to the closure of the Los Angeles refinery and weaker refining margins. TD Cowen also adjusted its outlook, lowering the price target to $127, while maintaining a Buy rating. The firm expects a 15% shortfall in Phillips 66’s first-quarter 2025 EBITDA due to increased refining operational expenses.
Additionally, Elliott Investment Management has nominated Stacy Nieuwoudt to Phillips 66’s board, advocating for changes to improve efficiency and competitiveness. Elliott’s campaign includes a podcast series promoting its board nominees, with the firm seeking influence at the company’s 2025 annual meeting. In response, Phillips 66 has addressed shareholder communications, refuting claims of independence by Elliott-backed Gregory J. Goff and emphasizing its value return through dividends and stock repurchases. Goff, however, has endorsed Elliott’s board nominees, criticizing Phillips 66’s governance and strategy.
These developments highlight ongoing strategic discussions and investor activities surrounding Phillips 66, as the company navigates market conditions and shareholder interests.
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