Mizuho maintains Neutral rating, $25 target on Delek US shares

Published 25/02/2025, 15:37
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On Tuesday, Mizuho (NYSE:MFG) Securities maintained its stance on Delek US Holdings, Inc. (NYSE:DK), reiterating a Neutral rating and a price target of $25.00. According to InvestingPro data, the stock is currently trading at $17.06, with analysts’ targets ranging from $14 to $25. Delek US reported fourth-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) that surpassed consensus estimates, which had been significantly reduced during the quarter due to a challenging operating environment. The company’s stock has experienced significant pressure, declining 39% over the past year.

The company’s performance has been viewed as slightly positive, as it continues to focus on the strategic direction for its logistics arm, Delek Logistics Partners LP (NYSE:DKL), and on realizing the value of its combined assets. Delek US is also making strides in executing its cash flow improvement plan, which aims to enhance margins and reduce costs in its refining operations. InvestingPro analysis reveals that the company operates with a significant debt burden, with a debt-to-equity ratio of 4.36, while maintaining a current ratio of 1.04.

Despite these positive developments, Mizuho’s reiteration of the Neutral rating reflects ongoing weak macro trends in the refining sector. The $25 price target is based on a net asset value (NAV) approach, taking into account the company’s assets and business prospects.

Delek US’s management efforts to unlock the sum-of-the-parts value and improve the company’s financial performance have been acknowledged by analysts. The company’s strategic initiatives are geared towards long-term growth and operational efficiency.

Investors and market watchers will continue to monitor Delek US’s progress, particularly in the refining segment, as the company navigates the current macroeconomic challenges. The stock’s performance and future outlook will likely be influenced by the company’s ability to maintain its operational improvements and execute on its strategic plans.

In other recent news, Delek US Holdings, Inc. announced a significant change in its executive team. Reuven Spiegel, the current Executive Vice President and Chief Financial Officer, will take on the additional role of Executive Vice President of Delek Logistics, effective February 12, 2025. This transition is part of a planned move, with Mr. Spiegel stepping down from his role as Chief Financial Officer on March 1, 2025. Mr. Spiegel has been with Delek US since May 2020 and has served on the board of directors of the general partner of Delek Logistics Partners, LP since July 2014. His previous experience includes leadership roles in the banking sector, notably as CEO of Israel Discount Bank Ltd. and IDB Bank of NY. The company confirmed there are no conflicts of interest related to Mr. Spiegel’s appointment, as per regulatory requirements. This executive change aligns with Delek US Holdings’ strategy to synchronize its leadership with its financial and operational goals.

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