Delek US Holdings Q2 adjusted loss smaller than expected as refining margins rise

Overview

• Delek US Holdings Q2 adjusted loss per share beats analyst expectations, per LSEG data

• Adjusted EBITDA rises to $170.2 mln, driven by refining margin increase

• Co advances Enterprise Optimization Plan, exceeding cash flow improvement targets

Outlook

• Delek US targets $130-$170 mln annual cash flow improvement from EOP

• Company executing on full-year Adjusted EBITDA guidance of $480-$520 mln

Result Drivers

• ENTERPRISE OPTIMIZATION - EOP contributed ~$30 mln in cash flow improvements, exceeding expectations

• PROCESSING CAPACITY EXPANSION - Completion of Libby 2 gas processing plant expanded capacity for producer customers

• REFINING MARGIN - Refining segment adjusted EBITDA rose due to increased crack spreads

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 8 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the oil & gas refining and marketing peer group is "buy."

• Wall Street's median 12-month price target for Delek US Holdings Inc is $22.50, about 6.4% above its August 5 closing price of $21.07

Press Release: ID:nBw2j51Y4a