Phillips 66 shares climbed more than 2 percent after Cowen and Company upgraded the energy company to "outperform" from "market perform" on a valuation call.
Phillips' business is positively linked to U.S. oil growth, which will rally soon, Cowen said. The stock traded around $78 on Wednesday.
Cowen analyst Sam Margolin has a price target of $92, which is based on a sum of parts analysis and represents nearly 21 percent upside from the previous close. Investors should buy the dip, the firm said.
"We see current PSX share price levels as an attractive entry point, especially for investors with a longer-term horizon. From a high level, we believe PSX's key business segments, including refining, NGLs and chemicals, are cyclically linked to volume growth of U.S. liquids (oil, NGL) production," Margolin said in a Wednesday note to clients.
He is bullish on the oil refinery world even though he said its stock is "hated right now" by investors.
"We have outperform ratings on all four large-cap refining names — Phillips was the last one to join the group. If you're looking at the [oil] cycle, certainly the downside is limited. From that standpoint, it's a bit of a broader call as well," Margolin said Wednesday on CNBC's "Halftime Report"
Phillips 66's shares have tumbled nearly 5 percent since the beginning of this year.