Delek Logistics Partners Sees Trading Jump After Positive Analyst Coverage

Delek Logistics Partners experienced a 1.5% increase in trading following Truist Securities' coverage initiation with a Buy rating and a $46 price target. Truist analyst Neal Dingmann foresees significant incremental free cash flow and a 2025 FCF yield of approximately 8%, driven by the stable high margin affiliate business and growing third-party activity. Additionally, the company has consistently increased its distribution each quarter and recently raised it to $1.055/unit, resulting in a yield of over 11%. The forecast indicates substantial cash flow growth in the coming quarters driven by the expansion of recently acquired assets.

Key Takeaways

• Delek Logistics (DKL) stock rose 1.5% in Friday's trading as Truist Securities initiated coverage with a Buy rating and a $46 price target.
• Truist's Neal Dingmann forecasts Delek Logistics to generate significant cash flow from the strategic business combination, estimating a 2025 FCF yield of ~8% and distribution yield of ~12%.
• Delek Logistics' cash flow is expected to grow significantly in the coming quarters, with strong upside potential from the expansion of the company's recently acquired assets.
• The company has achieved 44 consecutive quarters of distribution growth, reflecting its stable high margin affiliate business and growing third-party activity with improving margins.
• The recent quarterly increase to $1.055/unit reflects Delek Logistics' commitment to delivering consistent distribution growth, providing a yield of over 11%.

Analysis

Delek Logistics Partners saw a 1.5% surge in trading after Truist Securities' positive coverage and optimistic future forecasts. Truist's endorsement signals confidence in Delek's trajectory, potentially impacting investor sentiment and attracting more capital. The increased cash flow and distribution growth projections could benefit current shareholders and draw in new investors seeking high yields. This positive outlook might also influence the company's expansion plans, impacting affiliated businesses and third-party activities. In the short term, the stock price may experience fluctuations, while in the long term, sustained growth could position Delek Logistics as an attractive investment option, impacting the energy logistics sector and financial markets.

Did You Know?

• Delek Logistics (DKL) stock rose 1.5% in Friday's trading as Truist Securities initiated coverage with a Buy rating and a $46 price target.
• Truist's Neal Dingmann forecasts Delek Logistics to generate significant cash flow from the strategic business combination, estimating a 2025 FCF yield of ~8% and distribution yield of ~12%.
• The recent quarterly increase to $1.055/unit reflects Delek Logistics' commitment to delivering consistent distribution growth, providing a yield of over 11%.