Raymond James Adds Phillips 66 (PSX) to Stock List

Key Stock List Changes Announced

Investment firm Raymond James has updated its concentrated stock list, adding Phillips 66 (NYSE:PSX) while removing UMB Financial Corp. The change follows the departure of the analyst covering UMB Financial.

Analyst's Rationale and Market Overview

According to Raymond James energy analyst Justin Jenkins, Phillips 66 is positioned to benefit from higher-than-average prices and margins in refined products and chemicals for at least the next several months. The report notes the stock is trading at only a modest premium to its historical price-to-earnings and price-to-book ratios.

This move occurs amid a strong first-quarter earnings season, where consensus earnings per share expectations for 2026 have risen 5.5% year-to-date. The improvement has been broad-based across large, mid, and small-cap indexes.

Economic and Sector Performance

The market is also observing strong transaction volumes. Visa reported an 8% year-over-year increase in U.S. transaction volumes for the first quarter, accelerating to 9% in April. This marks the strongest growth since 2022. Concurrently, global central banks, including the U.S. Federal Reserve, are showing a bias toward rate increases due to ongoing geopolitical tensions.

Summary and Outlook

The inclusion of Phillips 66 reflects a bullish outlook on the energy sector's profitability. While the broader market shows strength from positive earnings, investors continue to monitor the hawkish stance of central banks as a key factor for future performance.

FAQ

Q: Why did Raymond James add Phillips 66 to its list?
A: The firm expects the company to benefit from high prices and margins on its refined products and chemicals for the next several months.

Q: What is the current stance of the U.S. Federal Reserve mentioned in the report?
A: The U.S. Federal Reserve and other global central banks have shifted their bias toward potential rate increases rather than decreases.

Source: Investing.com