UPDATE: Goldman Sachs Downgrades Delek US (DK) to Sell
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Goldman Sachs analyst Neil Mehta downgraded Delek US (NYSE: DK) from Neutral to Sell with a price target of $16.00 (from $18.00).
The analyst comments "We lower Delek US Holdings (DK) from Neutral to Sell in this report. There are three key drivers of our downgrade. First, valuation screens more expensive after DK shares have materially outperformed peers in the past three months, +89% versus the Refining S&P 1500 +47%. Second, we expect Brent-WTI and Brent-Midland differentials to remain unfavorable going forward, which we expect to weigh on DK earnings power. Third, we see more attractive risk/reward to Marathon Petroleum (MPC, Buy on CL). We also see exposure to regulatory risk around (1) restrictions on oil and gas activity on federal lands in the Permian and (2) elevated RINs prices. We now see (22)% total return to our DK price target versus +4% total return to c-corp peers."
Shares of Delek US closed at $21.35 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesGoldman Sachs, Standard & Poor's, Earnings
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