Delek US (NYSE:DK) Releases Quarterly Earnings Results

Key Points

• Delek US significantly beat quarterly expectations, reporting adjusted EPS of $5.48 versus the $2.67 consensus and revenue of $4.09 billion, up 47.9% year over year. Adjusted EBITDA reached $639 million, supported by stronger refining margins, throughput, and supply and marketing results.
• Delek Logistics delivered record quarterly adjusted EBITDA of approximately $144 million, while the Enterprise Optimization Plan contributed about $60 million to earnings. Management raised confidence in mid-cycle free cash flow of roughly $650 million to $700 million, including logistics distributions.
• Near-term risks remain: third-quarter refining margin capture could weaken as market backwardation flattens, and the company is still awaiting uncertain Small Refinery Exemption decisions to help offset elevated renewable fuel obligation costs. Shares fell 9.8% to $59.70 despite the earnings beat.

Delek US (NYSE:DK - Get Free Report) announced its quarterly earnings results on Wednesday. The oil and gas company reported $5.48 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.67 by $2.81, FiscalAI reports. The company had revenue of $4.09 billion during the quarter, compared to the consensus estimate of $3.44 billion. Delek US had a positive return on equity of 22.90% and a negative net margin of 0.48%.The company's revenue for the quarter was up 47.9% compared to the same quarter last year. During the same period in the prior year, the company earned ($0.56) earnings per share.

Here are the key takeaways from Delek US's conference call:

• Strong second-quarter results: Delek reported adjusted net income of approximately $344 million, or $5.48 per share, and adjusted EBITDA of $639 million. Excluding the 50% RVO adjustment, adjusted EBITDA was about $490 million, driven by stronger refining margins, higher throughput, and improved supply and marketing results.
• Record logistics performance and growth: Delek Logistics delivered approximately $144 million in quarterly adjusted EBITDA, its best result in company history, with momentum across crude, gas, and water operations. Management said the nearly completed sour-gas gathering, compression, processing, and AGI solution should support a step-up in gas volumes and future Delaware Basin growth.
• The Enterprise Optimization Plan contributed approximately $60 million to second-quarter P&L, while management said it is pursuing another meaningful improvement in free cash flow. The company expressed increasing confidence in mid-cycle free cash flow of roughly $650 million to $700 million, including DKL distributions.
• Delek returned capital through approximately $16 million of dividends and $20 million of buybacks during the quarter, while reducing standalone net debt by $72 million through a term-loan refinancing and paydown. Management reiterated its strategy of maintaining dividends, balancing debt reduction with repurchases, and avoiding excess cash accumulation.
• Third-quarter refining margins may face pressure as the steep backwardation seen in the second quarter has largely flattened; management indicated that the change could reduce refining margin capture. The company also remains dependent on pending Small Refinery Exemption decisions for 2025 and beyond to mitigate elevated RVO costs, with the timing and value of potential relief still uncertain.

Delek US Stock Down 9.8%

Delek US stock traded down $6.50 during mid-day trading on Wednesday, reaching $59.70. The company's stock had a trading volume of 1,993,461 shares, compared to its average volume of 1,226,687. The company has a market capitalization of $3.66 billion, a price-to-earnings ratio of -65.60, a price-to-earnings-growth ratio of 1.74 and a beta of 0.57. Delek US has a 12 month low of $19.81 and a 12 month high of $68.93. The business's 50 day simple moving average is $53.67 and its 200 day simple moving average is $44.44. The company has a debt-to-equity ratio of 10.51, a quick ratio of 0.49 and a current ratio of 0.76.

Delek US Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Monday, August 10th. Investors of record on Monday, August 3rd will be issued a dividend of $0.255 per share. The ex-dividend date is Monday, August 3rd. This represents a $1.02 annualized dividend and a yield of 1.7%. Delek US's dividend payout ratio is presently -112.09%.

Analysts Set New Price Targets

DK has been the subject of several research analyst reports. UBS Group boosted their price objective on Delek US from $42.00 to $48.00 and gave the company a "neutral" rating in a research report on Friday, April 10th. Citigroup raised their target price on shares of Delek US from $33.00 to $44.00 and gave the stock a "neutral" rating in a report on Monday, April 13th. Raymond James Financial lifted their price target on shares of Delek US from $60.00 to $70.00 and gave the company an "outperform" rating in a research note on Monday, July 13th. JPMorgan Chase & Co. increased their price objective on shares of Delek US from $57.00 to $62.00 and gave the stock a "neutral" rating in a research report on Tuesday, July 14th. Finally, Morgan Stanley increased their price objective on shares of Delek US from $41.00 to $45.00 and gave the stock an "equal weight" rating in a research report on Friday, June 12th. One analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating, six have issued a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has an average rating of "Hold" and an average target price of $51.92.

Insider Transactions at Delek US

In other Delek US news, EVP Reuven Spiegel sold 10,000 shares of the business's stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $44.36, for a total transaction of $443,600.00. Following the sale, the executive vice president directly owned 48,372 shares of the company's stock, valued at $2,145,781.92. The trade was a 17.13% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Robert G. Wright sold 10,720 shares of the firm's stock in a transaction dated Wednesday, May 13th. The shares were sold at an average price of $47.07, for a total value of $504,590.40. Following the completion of the transaction, the executive vice president owned 48,148 shares of the company's stock, valued at $2,266,326.36. The trade was a 18.21% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders sold 39,270 shares of company stock worth $1,828,718. 3.56% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of DK. Invesco Ltd. increased its position in shares of Delek US by 28.5% during the 4th quarter. Invesco Ltd. now owns 252,108 shares of the oil and gas company's stock worth $7,478,000 after purchasing an additional 55,941 shares during the last quarter. Mackenzie Financial Corp boosted its holdings in shares of Delek US by 631.7% in the 4th quarter. Mackenzie Financial Corp now owns 54,234 shares of the oil and gas company's stock valued at $1,619,000 after buying an additional 46,822 shares during the last quarter. XTX Topco Ltd boosted its holdings in shares of Delek US by 357.6% in the 4th quarter. XTX Topco Ltd now owns 138,495 shares of the oil and gas company's stock valued at $4,108,000 after buying an additional 108,231 shares during the last quarter. Voloridge Investment Management LLC grew its stake in shares of Delek US by 23.0% in the fourth quarter. Voloridge Investment Management LLC now owns 888,745 shares of the oil and gas company's stock valued at $26,360,000 after buying an additional 166,461 shares in the last quarter. Finally, Tudor Investment Corp ET AL grew its stake in shares of Delek US by 5.8% in the fourth quarter. Tudor Investment Corp ET AL now owns 367,955 shares of the oil and gas company's stock valued at $10,914,000 after buying an additional 20,144 shares in the last quarter. 97.01% of the stock is currently owned by institutional investors.

Delek US Company Profile

Delek US Holdings, Inc NYSE: DK is an independent downstream energy company engaged in the refining, logistics, and marketing of petroleum products. Headquartered in Brentwood, Tennessee, the company operates a network of inland refineries, storage terminals and pipelines, and convenience store locations. Delek US focuses on converting crude oil into a variety of finished products, including gasoline, diesel, jet fuel, asphalt and renewable fuels, serving wholesale and retail customers across the United States.

In its refining segment, Delek US owns and operates four inland refineries located in Texas and Arkansas.

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