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Delek US Holdings, Inc. (NYSE:DK) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results clearly exceeded expectations, with a substantial revenue beat leading to smaller losses in what looks like a definite win for investors. Revenues were US$2.1b and the statutory loss per share was US$1.20, smaller than the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the consensus from Delek US Holdings' nine analysts is for revenues of US$7.04b in 2021, which would reflect a chunky 8.7% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 65% to US$1.36. Before this earnings announcement, the analysts had been modelling revenues of US$7.04b and losses of US$0.56 per share in 2021. While next year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 14% to US$15.13per share, with the analysts clearly concerned by ballooning losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Delek US Holdings, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$11.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 8.7%, a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Delek US Holdings is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Delek US Holdings' revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Delek US Holdings' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Delek US Holdings going out to 2022, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Delek US Holdings you should be aware of, and 1 of them makes us a bit uncomfortable.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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