Delek US Holdings (DK) AI Stock Analysis

• Market Cap: $979.58M
• Dividend Yield: 6.41%
• Average Volume (3M): 1.49M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.86
• Revenue Growth: -28.68%
• EPS Growth: -4373.94%
• Country: US
• Employees: 3,591
• Sector: Energy
• Sector Strength: 57
• Industry: Fossil Fuels
• EPS (TTM): -10.38
• Shares Outstanding: 62,513,233
• 10 Day Avg. Volume: 2,162,236
• 30 Day Avg. Volume: 1,488,654
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.08
• Price to Cash Flow (P/CF): -1.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $19.22
• Price Target Upside: 26.20% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

Delek US Holdings presents a mixed outlook with financial instability posing significant risks, as reflected by declining revenues and profitability challenges. However, strategic acquisitions and optimistic earnings guidance provide some optimism. The stock's technical indicators and valuation show bearish signals, cautioning against immediate investments despite a high dividend yield. Overall, the company must focus on improving its cash generation and operational efficiency to enhance stock performance.

Positive Factors

Cash Flow Improvement

The Enterprise Optimization Plan is intended to lift refining free cash flow by $100 million, providing a potential pathway to restore investor confidence.

Strategic Initiatives

DK has made remarkable progress on the strategic initiatives aimed at unlocking its sum-of-the-parts value, having closed all the deals announced at the 2Q call and now focusing on improving its overall cost structure and performance in Refining with its Enterprise Optimization Plan.

Negative Factors

Refining Business Challenges

Refining business has little to no value beyond the ongoing Enterprise Optimization Plan, implying limited value at current levels.

Delek US Holdings Business Overview & Revenue Model

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.

How the Company Makes Money

Delek US Holdings generates revenue through its three core segments. The refining segment is the largest revenue contributor, where the company processes crude oil into refined products like gasoline, diesel, and jet fuel, which are then sold to wholesale and retail customers. The logistics segment earns money by providing crude oil gathering, transportation, and storage services, as well as services related to refined product pipelines and terminals. Delek's retail segment generates income through the sale of fuel and convenience store merchandise at its retail locations. Key partnerships, such as supply agreements with major oil producers and distributors, enhance its operational capabilities and contribute to its overall earnings.

Delek US Holdings Financial Statement Overview

Summary

Delek US Holdings faces financial instability with declining revenues and profitability issues reflected in the TTM data. Operational improvements are evident in gross profit margin, yet significant challenges remain in achieving positive net income and cash flows. The balance sheet shows a stronger equity position, but ongoing profitability and cash flow issues pose risks. Strategic focus on improving operational efficiency and cash generation is essential for financial sustainability.

Income Statement

The income statement shows significant volatility with TTM (Trailing-Twelve-Months) data reflecting negative EBIT and net income margins of -0.40% and -4.65%, respectively. Revenue has fluctuated over the years with a recent decline from 2022 to 2023. Gross profit margin improved in TTM to 20.76%, indicating potential operational efficiency gains despite overall profitability challenges.

Balance Sheet

The balance sheet reflects a substantial improvement in the debt-to-equity ratio from 3.16 in 2023 to 0.19 in TTM, driven by a reduction in total debt and an increase in stockholders' equity. The equity ratio increased to 8.63% in TTM, providing a more balanced capital structure. However, low return on equity (ROE) in TTM indicates challenges in generating returns on shareholders' equity.

Cash Flow

The cash flow statement highlights negative free cash flow in TTM, signaling potential liquidity challenges. Operating cash flow to net income ratio is negative, indicating inefficiencies in converting income to cash. The free cash flow to net income ratio also deteriorated, underscoring difficulties in maintaining positive cash flows amidst operational losses.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.85B	16.92B	20.25B	10.65B	7.30B
	Gross Profit
-67.90M	1.04B	924.60M	171.80M	-243.00M
	EBIT
-491.50M	279.90M	489.50M	-130.40M	-728.00M
	EBITDA
-18.50M	664.00M	899.30M	324.60M	-336.10M
	Net Income Common Stockholders
-560.40M	19.80M	257.10M	-170.50M	-570.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
735.60M	822.20M	841.30M	856.50M	787.50M
	Total Assets
6.67B	7.17B	8.19B	6.73B	6.13B
	Total Debt
107.50M	2.77B	3.23B	2.42B	2.53B
	Net Debt
-628.10M	1.94B	2.38B	1.57B	1.74B
	Total Liabilities
6.09B	6.21B	7.12B	5.78B	5.01B
	Stockholders Equity
575.20M	845.50M	943.60M	827.70M	1.01B
Cash Flow		Free Cash Flow
-497.40M	589.70M	113.90M	148.20M	-555.10M
	Operating Cash Flow
-66.80M	1.01B	425.30M	371.40M	-282.90M
	Investing Cash Flow
-603.20M	-408.00M	-931.60M	-178.40M	-191.30M
	Financing Cash Flow
221.70M	-624.70M	491.10M	-124.00M	306.40M

Delek US Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DK, the sentiment is Negative. The current price of 15.23 is below the 20-day moving average (MA) of 17.05, below the 50-day MA of 17.63, and below the 200-day MA of 19.55, indicating a bearish trend. The MACD of -0.73 indicates Positive momentum. The RSI at 35.76 is Neutral, neither overbought nor oversold. The STOCH value of 27.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DK.

Delek US Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSX	71 Outperform	$49.86B	24.49	7.27%	3.76%	-2.81%	-68.00%
MPC	67 Neutral	$44.58B	14.15	14.14%	2.43%	-6.70%	-57.84%
VLO	63 Neutral	$40.19B	14.87	10.87%	3.40%	-10.35%	-65.68%
DKL	63 Neutral	$2.25B	14.03	401.61%	10.40%	-7.82%	3.44%
Sector *	57 Neutral	$8.34B	5.35	-5.98%	7.29%	0.20%	-69.45%
DK	47 Neutral	$979.58M	―	-97.43%	6.41%	-28.68%	-4373.94%
PBF	46 Neutral	$2.37B	―	-9.63%	5.11%	-13.59%	-127.47%

Delek US Holdings Corporate Events

Delek US Holdings Announces Common Unit Repurchase Agreement

On February 24, 2025, Delek Logistics Partners, LP entered into a Common Unit Purchase Agreement with Delek US Holdings, Inc., allowing the repurchase of common units for up to $150 million through December 31, 2026. This strategic move, approved by the Board and independent committees, aims to enhance Delek Logistics’ cash flow and provide a tax-efficient method for Delek US to progress its Sum of the Parts goals. In 2024, Delek US faced a net loss of $413.8 million but made significant strides in improving profitability, including asset sales and strategic acquisitions. The company announced an Enterprise Optimization Plan expected to increase profitability by $120 million, and Delek Logistics reported a strong full-year EBITDA guidance. Despite challenging market conditions, Delek US aims to continue enhancing shareholder value and financial strength.

Delek US Appoints Reuven Spiegel as Executive VP

On February 19, 2025, Delek US Holdings, Inc. announced that Reuven Spiegel will take on the role of Executive Vice President, Delek Logistics, effective February 12, 2025, while transitioning from his position as Chief Financial Officer on March 1, 2025. Mr. Spiegel’s extensive experience includes serving as CEO of Israel Discount Bank and IDB Bank of NY, and his new role may enhance Delek’s strategic positioning within the logistics sector.

Delek US Holdings Expands Midstream with Key Acquisitions

Delek Logistics Partners, LP announced the completion of its acquisition of Gravity Water Intermediate Holdings LLC for $285 million. This strategic move enhances Delek’s integrated crude and water services in the Permian Basin, boosting synergies with its recent H2O Midstream acquisition and supporting its goal of increased EBITDA from third-party sources, thereby strengthening its position in the midstream sector.