Goldman Upgrades Delek US Holdings Inc. (NYSE:DK) To A Buy


Dallas, Texas 10/28/2013 (Financialstrend) – Delek US Holdings Inc. (NYSE:DK) is a $1.15 billion market capped oil refining and marketing company. In the previous week the stock earned a very valuable upgrade from rating firm Goldman Sachs. The rating agency has recommended a Buy on the stock from earlier rating of neutral. IT has also upped its price target to $37 per share. This represents a 44% appreciation on its trading price as of October 25. The rating agency has taken into account the strong ground the oil refinery is standing on w.r.t “Brent WTI crude oil spreads”.

In the light of this upgrade, the stock rallied upwards to post a 3.4% increase in its market value. In the past month the stock has appreciated by 19%. In the past 12 months, the oil refinery has posted sales of $8.99 billion and has managed to post net income of $282 million. It has paid out dividend of 0.6% in the past 12 months which translates to a dividend yield of 2.34%. In fact as part of its commentary which accompanied the upgrade, Goldman Sachs has commended the dividend payout pattern of the oil refinery as a true mark of company’s commitment to increase share holder value.

As of close of business on October 25, the stock was trading at $25.59 per share down 1.08% from its previous day close. At current valuations, the stock is trading at 29% above its 52 week low pricing. It is expected to announce results from operations of its 3Q over the next couple of weeks. In its 2Q, the oil refinery had managed to post a increase of 5.3% in its sales over the previous quarter. It had posted operating margins and profit margins which were up 5.4% and 4.4% respectively. Long term investors in the stock would be hoping that the stock would appreciate much more than the 14% it has appreciated in the past week.