Phillips 66 upgraded to Strong Buy on rising diesel, chemical margins amid Iran conflict and supply disruptions.

Phillips 66 (PSX) has been upgraded to a Strong Buy due to surging diesel and chemical margins driven by the war on Iran and the closure of the Strait of Hormuz. The company's heavy crude refining capacity and recent acquisition of WRB Refining enable it to benefit from high diesel prices and discounted Canadian heavy feedstock. Additionally, supply disruptions in Asia have boosted U.S. chemical operations, with polypropylene prices up 35% since March, aiding PSX's chemicals recovery. Despite a 35% rally year-to-date, PSX's dividend yield remains attractive, and earnings could reach $15–$25 per share depending on the war's duration, with price targets of $200–$250 per share possible.