Delek US Holdings: Conditions Aren't As Bad As They Look
Tristan R. Brown
Tristan R. Brown
Wed, Jul. 13, 3:56 PM
- Phillips 66 (PSX -0.2%) is downgraded to Equal Weight from Overweight with an $86 price target, lowered from $93, at Barclays, which sees limited upside especially if refining margins rebound and offer greater valuation growth potential to its large-cap peers, including Tesoro (TSO -2.6%), Valero (VLO +0.4%) and Marathon Petroleum (MPC -1.6%).
- Barclays also downgrades Delek US Holdings (DK -4.7%) to Equal Weight from Overweight with a $15 price target, cut from $20, on valuation and continuously challenged margin capture at both DK refineries, neither of which show visibility toward material improvement.
- Meanwhile, the firm upgrades Alon USA (ALJ +0.1%) to Equal Weight from Underweight after the company has significantly underperformed since the end of 2012.
Tue, Jul. 12, 3:45 PM
- Alon USA Energy (ALJ +5.1%) is sharply higher after saying it has discussed a potential business combination with Delek U.S. Holdings (DK +3.8%) as part of a broader examination of strategic alternatives.
- ALJ says it has formed a special committee of independent board members to lead the review of strategic alternatives and has hired JPMorgan Chase as financial advisor.
- ALJ also says it has not established a timetable for completing its strategic review, and does not expect to issue further statements about the strategic process unless there is a material event.
Mon, Jul. 11, 12:44 PM
- Delek US Holdings (DK -1.1%) is downgraded to Neutral from Overweight with a $12 price target, reduced from $12, at J.P. Morgan, which says the company's valuation and leverage combination are less promising.
- The firm says DK's retail and logistics segments are well positioned for significant growth, particularly if the company acquires the rest of Alon USA Energy, but cites concerns related to DK's balance sheet in case the current macro environment persisted.
- As in its downgrade of PBF Energy, the firm lowers its Q2 estimates "as cracks softened in the final weeks of Q2 and capture rates now look even more negative than we thought Q/Q,” adding that it also has lowered full-year estimates since strip cracks continued to decline in June.
Thu, May 26, 6:36 PM
- Oil refiners such as Marathon Petroleum (NYSE:MPC), Delek US Holdings (NYSE:DK) and HollyFrontier (NYSE:HFC) are better positioned than the market suggests, Deutsche Bank analysts say.
- The firm thinks current refiner share price levels offer an attractive entry point or to add to positions for longer-term investors, with MPC, DK and HFC screening best with respective 19%, 13% and 8% upside; while from a free cash flow standpoint, only Valero Energy (NYSE:VLO), MPC and HFC find themselves in positive territory, offering respective 6.3%, 5% and 1%.
- For shorter-term investors, the firm sees PBF Energy (NYSE:PBF), HFC and DK with the highest downside risk, while MPC is a relative winner in both cases.
- Contrary to popular belief that higher crude prices are all else being equal a negative for refiners, Deutsche Bank believes a slow grind higher to $60-$65/bbl could be a sweet spot for refiners since the structural advantage of U.S. refiners vs. international refining is more pronounced.
Thu, May 5, 5:39 PM
Wed, May 4, 5:35 PM
- ABCO, ABTL, ACAD, ACET, AHS, AHT, AIRM, AL, ALEX, AMBR, AMH, ANET, APLE, ASYS, ATHX, ATVI, ATW, BBG, BCEI, BIO, BIOS, BLDR, BOJA, CAA, CARA, CERN, CINR, CLNE, CLVS, CMLS, CPA, CTRL, CYBR, CZR, DATA, DCT, DEPO, DIOD, DK, DKL, DV, DWA, EBS, ECOM, ED, EFC, EGAN, EGL, EGN, EGY, ELON, ENDP, ENV, EOG, ERII, ESL, EVC, EVDY, EVHC, FCE.A, FEYE, FISV, FLR, FPRX, FTD, GBDC, GEOS, GERN, GPRO, GSAT, GST, GUID, GXP, HLF, HTGC, ICPT, IMMR, IMPV, INAP, JCOM, LADR, LOCO, MAIN, MCHX, MDR, MDRX, MDVN, MELI, MHK, MITT, MNTX, MRIN, MSI, MTD, MTZ, NBIX, NGVC, NSTG, NWSA, OLED, OMED, OUT, OVAS, PACD, PCTY, PEGA, PETX, PKI, PMT, POST, PRSS, PTCT, PTLA, QLGC, RPTP, RRMS, RWT, SAAS, SEM, SEMG, SNCR, SPPI, SPWR, SPXC, SQ, SSNC, SWIR, TCRD, TEAM, TRMR, TRUE, TRQ, TRUP, TSRO, TWOU, UBNT, UEPS, UNXL, WAGE, WAIR, WEB, WIFI, WING, XNPT, Y, YELP
Tue, Mar. 15, 7:47 PM
- Valero Energy (NYSE:VLO), PBF Energy (NYSE:PBF) and Delek US Holdings (NYSE:DK) are the three oil refiners with the most upside, Wells Fargo analysts say, liking the setup for the group headed into the important summer gasoline season, particularly Gulf coast refiners with meaningful exposure to light/heavy differentials.
- Among its five total Outperform-rated refiners, Wells finds Alon USA Energy (NYSE:ALJ) and Western Refining (NYSE:WNR) with the least upside potential.
- The firm says Marathon Petroleum (NYSE:MPC) typically would fit well within its outlook but uncertainty around the performance of its MLP and higher diesel yields restrains optimism.
- After spending much of Q1 at record high levels, Wells says U.S. gasoline inventories are now following a typical seasonal pattern of declines; inventories remain elevated in the mid-continent, west coast inventories are near historical averages for this time of year but at risk with the expected restart of the Torrance unit, and Gulf coast gasoline inventories are effectively flat Y/Y, which Wells calls "a positive sign."
Thu, Feb. 25, 5:19 PM
Wed, Feb. 24, 5:35 PM
- ACTG, ADSK, AEGR, AGO, AHT, AIRM, AL, ALEX, AMH, ATLS, AXLL, BGS, BIDU, BIO, BLOX, BMRN, BVN, CBI, CBPO, CLVS, COWN, CSU, CVT, DGI, DK, DKL, DLR, EBS, ENV, EOG, EVC, GERN, GG, GPS, GSAT, HASI, HEI, HK, HLF, HTGC, HWAY, IART, IM, IMMR, INTU, KBR, KHC, KND, KW, KWR, LYV, MACK, MAIN, MDVN, MELI, MHK, MITT, MNST, MTZ, NDLS, NNI, NTRI, OLED, OUT, OVAS, PANW, PBA, PEGA, PFMT, PODD, PRAA, RARE, RBA, RLOC, RPTP, RRC, RRMS, RTRX, SBAC, SEM, SEMG, SPLK, SPNC, SSRI, STAG, STMP, STRZA, SWN, TSRO, TWOU, TXMD, UHS, WIFI, WPG, WTW, XNPT, ZOES
Dec. 4, 2015, 12:41 PM
- Credit Suisse analyst Edward Westlake says favorable market conditions that drove the oil refining business this year will carry over into next year, making many refiner stocks strong buys.
- Global gasoline demand grew at 3x its historical rate in 2015, and while consensus expectations for gasoline demand predict a regression closer to the long-term trend in 2016, Westlake sees at least another year of strong demand growth remaining.
- The analyst says he has been surprised at Q4 performance so far , and predicts a 2016 environment conducive to earnings strength, especially among coastal names.
- Credit Suisse has Outperform ratings on these refiners: VLO +1.6%, NTI +0.5%, CLMT +1.5%, MPC +3%, TSO +1.2%, ALDW -2.3%, WNR +1.6%, PBF +0.2%, DK +1.7%.
Nov. 23, 2015, 11:32 AM
- Phillips 66 (PSX +0.2%) is downgraded to Sell from Neutral at Goldman Sachs, which believes elevated share prices in the group now make stock picking critical when it comes to refiners.
- Goldman says it continues to believe refiners will benefit from strong gasoline demand, capital returns to shareholders and favorable capture rates due to low oil prices, but is more concerned about tighter inland crude differentials, MLP-related upside and potential oversupply in the diesel markets.
- The firm says Valero Energy (VLO +1%) is its top pick in the group, while also upgrading PBF Energy (PBF +3.3%) to Buy from Neutral; it also likes Marathon Petroleum (MPC +0.7%) and Delek US Holdings (DK +1.2%).
Nov. 3, 2015, 5:04 PM
- Delek US (NYSE:DK): Q3 EPS of $0.29 may not be comparable to consensus of $0.83.
- Revenue of $1.55B (-33.2% Y/Y) misses by $20M.
Nov. 2, 2015, 5:35 PM
- ACHC, AFG, AIV, AMSG, ASH, ATVI, AWR, BIO, BKH, CBPO, CBS, CERN, CHEF, CHUY, CIM, CKP, CSU, CSV, CVC, DAC, DENN, DHT, DK, DKL, DVA, DVN, ECYT, ENPH, ENSG, EPIQ, ETSY, EVRI, FANG, FARO, FIVN, FLTX, FMI, FOGO, GHDX, GMED, GRPN, HCI, HL, HLF, HRZN, IAG, IPHS, IRWD, ITRI, IVR, JCOM, KEG, LLNW, MPO, MTZ, MXL, MYGN, NFX, NYMT, OAS, OCLR, OESX, OFIX, OKE, OKS, ORA, PAA, PAGP, PAYC, PBPB, PKD, QUAD, REGI, RIGL, RLOC, RP, RPAI, RXN, SLW, SSNI, SUPN, TDW, TMH, TSLA, TSRA, TX, UNTD, USNA, VNDA, WBMD, WR, WTR, X, XEC, XOXO, XXIA, Y, ZAGG, ZEN, ZNGA
Aug. 14, 2015, 12:47 PM
- The Obama administration will allow limited sales of crude oil to Mexico for the first time, Reuters reports, citing a senior administration official who says the U.S. Commerce Department is "acting favorably on a number of applications" to export U.S. crude in exchange for imported Mexican oil.
- The shipments, likely to be lighter, high-quality shale oil, would help Mexico's aging refineries produce more premium fuels, while U.S. refiners would continue to get Mexican heavy oil, a better match for them than the light oil coming from Texas and North Dakota.
- Although limited in scope, the move toward freeing up trade will please U.S. oil producers such as Pioneer Natural Resources (NYSE:PXD) and ConocoPhillips (NYSE:COP), which say the restrictions force them to sell oil at below global market rates, and may add momentum to efforts mostly to repeal what advocates see as a relic of the 1970s.
- Among relevant oil stocks: XOM, CVX, BP, RDS.A, RDS.B, OAS, NOG, CLR, WLL, EOX, SM, SFY, PVA, GST, SN, CRK, BBG, CWEI
- Relevant refining stocks: VLO, HFC, MPC, TSO, WNR, ALJ, PSX, PBF, DK, NTI, ALDW
- ETFs: XLE, XOP, XES, IEO, IEZ, PXE, NDP
Aug. 4, 2015, 6:58 PM
- Exxon Mobil (NYSE:XOM) says it has reversed a 71-mile segment of its North Line oil pipeline from Longview, Tex., to northern Louisiana, in the first step of a bigger plan to link Permian Basin output to Louisiana refineries.
- The segment is helping feed ~15K bbl/day of Texas crude to Delek US Holdings' (NYSE:DK) Arkansas refinery, displacing barrels that had been trucked or railed to the plant at higher transportation costs, DK executive VP Mark Smith told analysts during today's earnings conference call.
- Smith said DK's 80K bbl/day El Dorado refinery is North Line's sole shipper until XOM finishes reversing another idle stretch to Baton Rouge, where XOM operates a 502.5K bbl/day refinery.
Aug. 3, 2015, 11:19 PM
- Delek US (NYSE:DK): Q2 EPS of $0.79 may not be comparable to consensus of $1.05.
- Revenue of $1.69B (-28.7% Y/Y) beats by $120M.
Delek US Holdings, Inc. is a diversified downstream energy company. The company is engaged in the petroleum refining, the wholesale distribution of refined products and convenience store retailing. It operates through three business segments: Refining, Logistics and Retailing. The Refining... More
Sector: Basic Materials
Industry: Oil & Gas Refining & Marketing
Country: United States
Other News & PR