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Delek US Holdings (DK) Up 6.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Delek US Holdings (DK - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Delek US Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Delek US Q1 Earnings & Revenues Outpace Estimates
Delek US Holdings reported first-quarter 2023 adjusted net income of $1.37 per share, which beat the Zacks Consensus Estimate of $1.06 cents. The bottom line also improved from the year-ago quarter’s level of 58 cents. The outperformance could be attributed to record contributions from the Refining and Logistics segments.
Adjusted EBITDA came in at $284.6 million compared with $83.6 million in the year-ago period.
Net revenues decreased 12% year over year to $3.9 billion due to underperformance of the Retail segment. The figure, however, beat the consensus mark of $3.3 billion.
On May 2, 2023, DK’s board of directors approved a 4.5% increase in the regular dividend, bringing the quarterly payout to 23 cents per share.
Segmental Details
Refining: In the first quarter of 2023, this segment recorded an adjusted EBITDA of $230.2 million, reflecting a remarkable improvement from the year-ago quarter’s level of $39.2 million.
This significant year-over-year surge can be attributed to higher refining crack spreads, with DK’s benchmark crack spreads increasing approximately 29.6% during the period.
Logistics: During the reported quarter, the segment registered an adjusted EBITDA of $91.4 million compared with $64 million in the year-ago quarter. This substantial growth can be attributed to the exceptional performance of the Delek Permian Gathering system and the successful acquisition of 3 Bear Delaware.
Retail: Adjusted EBITDA for the segment amounted to $6.4 million, indicating a decline from the prior-year quarter’s $ 10.3 million.
The deterioration was largely due to lower average margins compared with the year-ago quarter’s figure.
Merchandise sales of $73.9 million were higher than the year-ago quarter’s level of $69.7 million. The figure missed the Zacks Consensus Estimate by 1.3%. The merchandise margin of 33.0% declined from 34.6% recorded in the year-ago period.
DK’s retail stations sold 39,964 thousand gallons of gasoline compared with 39,505 in the comparable period of 2022.
Financials
Total operating expenses in the first quarter decreased about 14.3% to $3,781.5 million from the prior-year period’s figure. Delek US spent $192 million on capital programs (about 76.6% on the Refining segment) in the same time frame.
As of Mar 31, 2023, the company had cash and cash equivalents worth $865 million and long-term debt of $2,725.5 million, with debt to total capital of about 71.2%.
Guidance
For the full-year 2023, Delek US expects capital expenditures of approximately $350 million. It plans to spend $202 million on Refining, $81 million on Logistics, $31 million on Retail and $36 million on Corporate/Other.
For the second quarter, DK expects operating costs of $195-$205 million, general and administrative costs of $70-$80 million, depreciation and amortization costs of $80-$90 million, and net interest expense of $70-$80 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -31.67% due to these changes.
VGM Scores
Currently, Delek US Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Delek US Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Delek US Holdings is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Murphy USA (MUSA - Free Report) , a stock from the same industry, has gained 0.3%. The company reported its results for the quarter ended March 2023 more than a month ago.
Murphy USA reported revenues of $5.08 billion in the last reported quarter, representing a year-over-year change of -0.8%. EPS of $4.80 for the same period compares with $6.08 a year ago.
For the current quarter, Murphy USA is expected to post earnings of $5.49 per share, indicating a change of -27.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.4% over the last 30 days.
Murphy USA has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Delek US Holdings (DK) Up 6.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Delek US Holdings (DK - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Delek US Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Delek US Q1 Earnings & Revenues Outpace Estimates
Delek US Holdings reported first-quarter 2023 adjusted net income of $1.37 per share, which beat the Zacks Consensus Estimate of $1.06 cents. The bottom line also improved from the year-ago quarter’s level of 58 cents. The outperformance could be attributed to record contributions from the Refining and Logistics segments.
Adjusted EBITDA came in at $284.6 million compared with $83.6 million in the year-ago period.
Net revenues decreased 12% year over year to $3.9 billion due to underperformance of the Retail segment. The figure, however, beat the consensus mark of $3.3 billion.
On May 2, 2023, DK’s board of directors approved a 4.5% increase in the regular dividend, bringing the quarterly payout to 23 cents per share.
Segmental Details
Refining: In the first quarter of 2023, this segment recorded an adjusted EBITDA of $230.2 million, reflecting a remarkable improvement from the year-ago quarter’s level of $39.2 million.
This significant year-over-year surge can be attributed to higher refining crack spreads, with DK’s benchmark crack spreads increasing approximately 29.6% during the period.
Logistics: During the reported quarter, the segment registered an adjusted EBITDA of $91.4 million compared with $64 million in the year-ago quarter. This substantial growth can be attributed to the exceptional performance of the Delek Permian Gathering system and the successful acquisition of 3 Bear Delaware.
Retail: Adjusted EBITDA for the segment amounted to $6.4 million, indicating a decline from the prior-year quarter’s $ 10.3 million.
The deterioration was largely due to lower average margins compared with the year-ago quarter’s figure.
Merchandise sales of $73.9 million were higher than the year-ago quarter’s level of $69.7 million. The figure missed the Zacks Consensus Estimate by 1.3%. The merchandise margin of 33.0% declined from 34.6% recorded in the year-ago period.
DK’s retail stations sold 39,964 thousand gallons of gasoline compared with 39,505 in the comparable period of 2022.
Financials
Total operating expenses in the first quarter decreased about 14.3% to $3,781.5 million from the prior-year period’s figure. Delek US spent $192 million on capital programs (about 76.6% on the Refining segment) in the same time frame.
As of Mar 31, 2023, the company had cash and cash equivalents worth $865 million and long-term debt of $2,725.5 million, with debt to total capital of about 71.2%.
Guidance
For the full-year 2023, Delek US expects capital expenditures of approximately $350 million. It plans to spend $202 million on Refining, $81 million on Logistics, $31 million on Retail and $36 million on Corporate/Other.
For the second quarter, DK expects operating costs of $195-$205 million, general and administrative costs of $70-$80 million, depreciation and amortization costs of $80-$90 million, and net interest expense of $70-$80 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -31.67% due to these changes.
VGM Scores
Currently, Delek US Holdings has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Delek US Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Delek US Holdings is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Murphy USA (MUSA - Free Report) , a stock from the same industry, has gained 0.3%. The company reported its results for the quarter ended March 2023 more than a month ago.
Murphy USA reported revenues of $5.08 billion in the last reported quarter, representing a year-over-year change of -0.8%. EPS of $4.80 for the same period compares with $6.08 a year ago.
For the current quarter, Murphy USA is expected to post earnings of $5.49 per share, indicating a change of -27.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.4% over the last 30 days.
Murphy USA has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.