Mizuho Securities analyst Nitin Kumar CFA maintained a Sell rating on Delek US Holdings (DK – Research Report) on February 27 and set a price target of $26.00.
Nitin Kumar CFA has given his Sell rating due to a combination of factors including Delek US Holdings’ underperformance in the refining sector and competitive disadvantages. Despite a solid operational showing in terms of total throughput, the company struggled with a tougher crack spread environment, which significantly impacted their margins. The refining segment notably underperformed against expectations, which was a key driver for the negative rating. Kumar also points to Delek’s relative position in the market, suggesting that there are more competitively positioned companies investors could consider.
Additionally, while the logistics and retail sectors of Delek US Holdings showed some positive aspects, they were not enough to offset the shortcomings in the refining segment. Logistics performed well, but retail margins were lower than anticipated, diluting the impact of higher fuel retail volumes. The firm’s efforts to return value to shareholders through repurchases and a slight dividend increase did little to sway Kumar’s perspective, given the broader financial challenges highlighted by the weaker-than-expected earnings results. The anticipation of lower capital expenditures for 2024 further reinforces the cautious outlook on the company’s growth prospects.
Kumar CFA covers the Energy sector, focusing on stocks such as Chevron, Diamondback, and Civitas Resources. According to TipRanks, Kumar CFA has an average return of 17.0% and a 68.22% success rate on recommended stocks.
In another report released on February 27, Wells Fargo also assigned a Sell rating to the stock with a $21.00 price target.
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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.
Read More on DK:
- Delek Logistics Partners, LP and Delek Logistics Finance Corp. Announce Tender Offer for Any and All of their Outstanding 6.75% Senior Notes due 2025
- Delek US price target raised to $21 from $19 at Wells Fargo
- Delek US Holdings Q4 Earnings Presentation Webcast
- Delek US Holdings Reports Fourth Quarter 2023 Results and 2024 Capital Program
- Delek US reports Q4 adjusted EPS ($1.46), consensus ($1.27)
