Delek Logistics Partners LP (NYSE:DKL) is predicted to grow its earnings per share by a robust double-digit 46.98% over the next three years. Presently, with an EPS of $1.901, we can expect an upcoming EPS of $2.794. To determine whether this growth rate expectation is justified, we should take a look at how the company has been performing in the past. Check out our latest analysis for Delek Logistics Partners
Can we expect DKL to keep growing?
Analyst expectation from the stock’s 2 analysts is one of positive sentiment, with earnings estimated to expand from current levels of $1.901 to $2.794 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 46.98% over the next few years, which is an optimistic outlook in the near term. In the same period and net income is predicted to escalate from $46M to $68M in the next couple of years, growing by 46.98%. However, margins look rather unappealing at the current levels of revenue and earnings.
Basis for the growth
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. DKL’s triple-digit earnings growth the past couple of years indicates that the company’s past performance will continue to persist into the future. This means DKL has already proven its capacity to grow at an elevated rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
For DKL, I’ve compiled three important factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is DKL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether DKL is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of DKL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.