Phillips 66 PSX
Phillips 66's conglomerate structure traps value; spinning Midstream, selling the CPChem JV, and fixing refining lifts the stock from $120 to ~$200, with Marathon-style execution reaching $300+.
Thesis
Elliott argues that Phillips 66 has materially underperformed refining peers Valero and Marathon for more than a decade — shares lagged by 163% on a 10-year total-return basis — because an inefficient conglomerate structure obscures the value of four high-quality segments (Refining, Midstream, Chemicals, Marketing & Specialties). Over 70% of 2025 EBITDA comes from premium-multiple businesses, yet the combined entity trades near its lowest-multiple segment and the market implies only ~$1bn of value for a 2 MMbbl/d refining system that would be worth ~$34bn at Valero-equivalent economics. Elliott's 'Streamline 66' plan demands spinning or selling Midstream, divesting the CPChem JV stake and the German/Austrian JET retail unit, committing to VLO/MPC-level refining EBITDA per barrel, and adding independent directors with a leadership review. Base case is ~$200/share (+65%); full Marathon-path execution drives $300+ (>150%).
SCQA
Phillips 66 is the third-largest US independent refiner — a $69bn conglomerate combining 11 refineries (~2 MMbbl/d), a wellhead-to-water Permian/DJ NGL midstream platform, a 50% CPChem petrochemicals JV with Chevron, and ~9,000 branded retail sites.
The conglomerate structure buries asset quality: shares trade near the refining multiple despite 70% of EBITDA sitting in premium midstream, chemicals and M&S, while refining itself materially lags Valero and Marathon on EBITDA per barrel and divestiture proceeds are recycled into more midstream M&A.
Execute 'Streamline 66' — sell or spin Midstream, divest the CPChem JV interest and German/Austrian JET retail, commit to peer-level refining EBITDA/bbl targets, and add independent directors with a review of executive leadership.
Plan implies ~$200 per share vs $120 today — 65% upside, bridged by +$36 Midstream unlock, +$18 refining improvement, +$24 non-core divestitures and capital return; full Marathon-path execution drives the stock above $300 (>150% upside).
The three reasons
- 1
Market implies only ~$1bn for PSX refining vs $34bn at Valero-equivalent $/bbl — the core business is valued at zero
- 2
Phillips trailed Valero and Marathon by 163% over 10 years while management missed targets and recycled divestiture proceeds into midstream M&A
- 3
'Streamline 66' spin/sale plan unlocks ~$200/share (+65%); Marathon-style execution drives $300+ (>150%)
Primary demands
- Sell or spin the Midstream business
- Pursue a sale of Phillips' 50% JV interest in CPChem
- Execute the announced plan to sell the German and Austrian JET retail business
- Commit to refining EBITDA per barrel in line with Valero and Marathon on a like-for-like basis
- Add new independent directors and conduct a review of executive leadership
KPIs cited
Pattern membership
Precedents cited
- Marathon Petroleum turnaround under Mike Hennigan (Elliott's 2019 engagement; 495% TSR since leadership change)
- Marathon Speedway sale (~$17bn net proceeds)
- Marathon Andeavor acquisition as a conglomerate misstep later reversed
- Suncor operational turnaround under CEO Rich Kruger (2023+)
Composition what's on the 53 slides
Slide gallery ·
Notes
Public Elliott campaign deck under the 'Streamline 66' brand (Route-66 highway-sign motif, red/black/white palette, tabbed nav: Executive Summary / Valuable Assets / Underperforming / Streamline 66 / Appendix). Classified as follow_up because Elliott's public engagement with PSX predates this (initial Nov 2023 letter); the Feb 2025 deck is the first comprehensive public 'Streamline 66' plan but builds on a prior campaign. Three-pillar diagnosis (Inefficient Conglomerate / Poor Operating Performance / Damaged Management Credibility) maps cleanly onto a three-pillar prescription (Streamline Portfolio / Operating Review / Enhanced Oversight). CEO Mark Lashier is named and his earnings-release quotes are juxtaposed directly against Suncor CEO Rich Kruger in a striking best-practice comparison on p.31. Stake not disclosed in the deck itself. No single named signatory; Elliott firm-branded only.