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Delek Logistics (DKL)
NYSE:DKL
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Delek Logistics
(NYSE:DKL)65Neutral
Positive Factors
Strategic Updates
Strategic updates have been announced, enhancing the company's future prospects and providing a potential upside.
Yield and Growth
The company offers a top-quartile yield and growth outlook, making it an attractive investment proposition.
Negative Factors
Market Reaction
The market has not fully digested the impact of recent strategic transactions, which may lead to short-term volatility.
Delek Logistics (DKL) vs. S&P 500 (SPY)
Market Cap
$2.25B
Dividend Yield10.4%
Average Volume (3M)180.54K
Price to Earnings (P/E)14.0
Beta (1Y)0.29
Revenue Growth-7.82%
EPS Growth3.44%
CountryUS
EmployeesN/A
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.99
Shares Outstanding53,667,522
10 Day Avg. Volume171,582
30 Day Avg. Volume180,539
Financial Highlights & Ratios
PEG Ratio4.08
Price to Book (P/B)N/A
Price to Sales (P/S)2.35
Price to Cash Flow (P/CF)11.10
P/FCF Ratio197.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$46.50Price Target Upside14.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Delek Logistics Business Overview & Revenue Model
Company DescriptionDelek Logistics Partners, LP (DKL) is a publicly traded master limited partnership that operates and develops logistics and marketing assets for crude oil, refined products, and natural gas in the United States. The company primarily serves the midstream sector, managing pipelines, transportation, storage, and wholesale marketing of its products. DKL's core services include the transportation and storage of crude oil and refined products, as well as providing marketing services to third parties and affiliates.
How the Company Makes MoneyDelek Logistics makes money through a variety of revenue streams centered around its midstream energy operations. The company's primary sources of income include fees generated from transporting crude oil and refined products through its network of pipelines, as well as from the storage services provided by its tank farms and terminals. Additionally, DKL earns revenue by marketing petroleum products, where it leverages its infrastructure to purchase and sell crude oil and refined products. Another key component of its revenue model is long-term contracts and fee-based arrangements with Delek US Holdings, Inc., its parent company, and other third-party customers, which provide stable and predictable cash flows. Strategic partnerships and acquisitions also play a significant role in expanding its operational capabilities and market reach, further contributing to its earnings.
Delek Logistics Financial Statement Overview
Summary
Delek Logistics shows strong operational efficiency and cash flow generation but faces challenges with revenue volatility and high leverage. The company must address its debt levels and stabilize revenue growth to improve its financial health.Income Statement
The income statement shows a mixed performance. The company has maintained a steady gross profit margin, but the net profit margin has seen fluctuations. Revenue growth has been inconsistent, with a notable decline in the latest period. Despite this, EBITDA margins suggest strong operational efficiency.70
Positive
Balance Sheet
The balance sheet reveals high leverage with a significant debt-to-equity ratio, indicating potential financial risk. However, the company has managed to maintain a positive equity ratio recently, which suggests some stabilization in its financial structure.50
Neutral
Cash Flow
Cash flow analysis indicates robust operating cash flow relative to net income, highlighting good cash conversion. However, free cash flow growth has been inconsistent, and heavy capital expenditures could impact future liquidity.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 940.64M | 1.02B | 1.04B | 700.90M | 563.42M | Gross Profit |
| 243.75M | 284.96M | 249.40M | 217.15M | 206.74M | EBIT |
| 202.83M | 238.95M | 209.68M | 190.50M | 179.79M | EBITDA |
| 394.70M | 370.99M | 301.95M | 256.14M | 236.09M | Net Income Common Stockholders |
| 142.69M | 126.24M | 159.05M | 164.82M | 159.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.38M | 3.75M | 7.97M | 4.29M | 4.24M | Total Assets |
| 2.04B | 1.64B | 1.68B | 935.07M | 956.42M | Total Debt |
| 11.34M | 1.72B | 1.68B | 919.85M | 1.02B | Net Debt |
| 5.96M | 1.72B | 1.67B | 915.56M | 1.01B | Total Liabilities |
| 2.01B | 1.80B | 1.79B | 1.04B | 1.06B | Stockholders Equity |
| 35.53M | -161.87M | -110.70M | -103.99M | -108.30M |
| Cash Flow | Free Cash Flow | |||
| 77.30M | 124.97M | 45.47M | 251.15M | 179.73M | Operating Cash Flow |
| 206.34M | 225.32M | 192.17M | 275.16M | 193.02M | Investing Cash Flow |
| -384.58M | -89.63M | -770.44M | -16.36M | -123.14M | Financing Cash Flow |
| 179.87M | -139.91M | 581.95M | -258.75M | -71.18M |
Delek Logistics Technical Analysis
Negative
40.44
Price Trends
41.71
Negative
39.76
Positive
38.86
Positive
Market Momentum
-0.09
Positive
41.96
Neutral
46.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DKL, the sentiment is Negative. The current price of 40.44 is below the 20-day moving average (MA) of 41.45, below the 50-day MA of 41.71, and above the 200-day MA of 38.86, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 41.96 is Neutral, neither overbought nor oversold. The STOCH value of 46.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DKL.
Delek Logistics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $63.37B | 14.38 | 13.40% | 6.96% | 5.20% | 18.35% | |
79 Outperform | $14.76B | 9.63 | 50.12% | 9.04% | 16.06% | 54.94% | |
78 Outperform | $13.58B | 26.36 | 7.56% | 6.90% | 3.28% | -47.59% | |
77 Outperform | $72.16B | 12.50 | 20.78% | 6.30% | 12.71% | 6.74% | |
73 Outperform | $131.05B | 25.68 | 8.26% | 6.21% | 24.95% | -17.19% | |
65 Neutral | $2.25B | 14.03 | 401.61% | 10.40% | -7.82% | 3.44% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% |
* Energy Sector Average
Performance Comparison
DKL
Delek Logistics
41.27
1.31
3.28%
ET
Energy Transfer
17.70
3.60
25.53%
EPD
Enterprise Products Partners
33.09
6.88
26.25%
PAA
Plains All American
19.00
3.35
21.41%
WES
Western Midstream Partners
37.87
6.41
20.38%
TSE:ENB
Enbridge
61.01
15.98
35.47%
Delek Logistics Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 1.05% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
Despite a challenging refining margin environment and significant net losses, Delek made notable advancements in operational performance, strategic asset management, and cost savings, signaling a forward-looking approach to improving financial health and shareholder value.Highlights
Improved Operational Performance
Significant progress in improving operations, including a successful major turnaround at KSR and improved reliability at Big Spring, consistently running over 70,000 barrels per day.
Sum of the Parts Strategy Progress
Sold retail asset for $1.49 billion and executed an economic swap of assets between DK and DKL, improving profitability and extending contract certainty.
Cost Savings and Cash Flow Improvement
Completed zero-based budget initiative, saving $100 million, and advanced the enterprise optimization plan (EOP) to improve cash flow by $80 to $120 million per year.
Delek Logistics Growth
DKL announced two accretive acquisitions adding around $100 million in third-party EBITDA and progressing capacity expansion in the LiviGas processing complex.
Shareholder Returns
Paid $16 million in dividends and repurchased $22 million of shares, indicating commitment to a balanced capital allocation strategy.
Lowlights
Challenging Refining Margin Environment
Refining margins were approximately $6 below mid-cycle in Q4 2024, impacting overall financial performance.
Supply and Marketing Losses
Supply and marketing contributed a loss of $34.6 million in Q4, attributed to seasonal low demand and specific supply challenges.
Net Loss and Goodwill Impairment
Reported a net loss of $414 million, including a partial impairment of goodwill balance of $212 million.
Increased Operating Expenses
Operating expenses for Q1 2025 expected to be between $220 million and $235 million, influenced by higher throughput, natural gas prices, and planned maintenance.
Company Guidance
During the fourth-quarter call, Delek US Holdings provided guidance and insights into their financial and operational performance. The company reported a net loss of $414 million, or negative $6.55 per share, with an adjusted net loss of $161 million, or negative $2.54 per share. Adjusted EBITDA showed a loss of $23 million, primarily driven by an $80 million decrease in refining contribution due to a challenging refining margin environment. The logistics segment, however, delivered a robust $107 million in adjusted EBITDA. Operationally, throughput volumes across various refineries were highlighted, with Tyler showing approximately 66,000 barrels per day and Big Spring at around 73,000 barrels per day. Delek's sum of the parts strategy resulted in the sale of their retail asset for $1.49 billion and a strategic swap of assets between Delek and Delek Logistics, aiming to enhance profitability and cash flow certainty. Delek Logistics anticipated adding $100 million in third-party EBITDA from recent acquisitions, contributing to a projected increase in EBITDA from $430 million to a range of $480-$520 million. The company also completed a zero-based budgeting initiative, achieving cost savings of around $100 million. For the first quarter of 2025, Delek expects operating expenses between $220-$235 million and general and administrative expenses between $55-$60 million, with a focus on further improving operational efficiency and cash generation through their Enterprise Optimization Plan.Delek Logistics Corporate Events
Executive/Board Changes
Delek Logistics Announces Leadership Change in 2025
Neutral
Feb 19, 2025
On February 19, 2025, Delek Logistics Partners, LP announced a leadership change as Reuven Spiegel, the Executive Vice President and Chief Financial Officer, will also assume the role of Executive Vice President of Delek Logistics effective February 12, 2025. This change follows the departure of Odely Sakazi, who left the company on February 12, 2025, and will receive a severance package subject to certain conditions.
M&A TransactionsBusiness Operations and Strategy
Delek Logistics Expands with Strategic Acquisition
Positive
Jan 3, 2025
Delek Logistics Partners, LP announced the closing of its acquisition of Gravity Water Intermediate Holdings LLC, a move that enhances its midstream services in the Permian and Bakken basins. This $285 million acquisition, paid partly in cash and equity, strengthens Delek Logistics’ integrated crude and water services, promising significant synergies and increased EBITDA from third-party sources, thus reinforcing its market positioning and value for stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.