Wells Fargo analyst Roger Read has maintained their bearish stance on DK stock, giving a Sell rating on December 13.
Roger Read has given his Sell rating to Delek US Holdings based on a combination of factors that suggest a less favorable outlook for the company’s financial performance. The revised estimates for the fourth quarter of 2023 and the first half of 2024 reflect an expected decrease in EBITDA, influenced by weaker crack spreads, particularly in the Gulf Coast gasoline market. This anticipated weakness in refining results is a key driver behind the diminished expectations for the company’s near-term earnings.
Furthermore, despite the company’s plans to operate at normal industry-wide utilization rates, there are additional concerns, such as increased depreciation and amortization costs, which have been adjusted upward. While operational expenses are projected to remain stable, and management expects a notable EBITDA run-rate for Delek Logistics (DKL), the overall financial picture painted by these adjustments led to a lower price target for Delek US Holdings. This, coupled with the existing net debt position and the estimated return on invested capital, underpins the rationale for Read’s recommendation to sell the stock.
In another report released on December 13, J.P. Morgan also maintained a Sell rating on the stock with a $28.00 price target.
DK’s price has also changed moderately for the past six months – from $23.740 to $26.470, which is a 11.50% increase.
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Delek US Holdings (DK) Company Description:
Delek US Holdings, Inc. engages in the transportation, storage, and wholesale distribution of crude oil. It operates through the following segments: Refining, Logistics, Retail, and Corporate and Other. The Refining segment processes crude oil and other purchased feedstocks for the manufacture of transportation motor fuels, including gasoline, diesel fuel and aviation fuel, asphalt, and other petroleum-based products. The Logistics segment gathers, transports, and stores crude oil and markets, distributes, transports, and stores refined products. The Retail segment markets gasoline, diesel and other refined petroleum products, and convenience merchandise through a network of company-operated retail fuel and convenience stores. The company was founded in 2001 and is headquartered in Brentwood, TN.
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