New Forecasts: Here's What Analysts Think The Future Holds For Delek US Holdings, Inc. (NYSE:DK)
Shareholders in Delek US Holdings, Inc. (NYSE:DK) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the latest upgrade, the ten analysts covering Delek US Holdings provided consensus estimates of US$12b revenue in 2023, which would reflect a disturbing 39% decline on its sales over the past 12 months. Per-share earnings are expected to grow 13% to US$4.33. Before this latest update, the analysts had been forecasting revenues of US$11b and earnings per share (EPS) of US$3.71 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Check out our latest analysis for Delek US Holdings
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$31.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Delek US Holdings analyst has a price target of US$53.00 per share, while the most pessimistic values it at US$24.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Delek US Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 39% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 14% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.9% per year. So it's pretty clear that Delek US Holdings' revenues are expected to shrink faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Notably, analysts also upgraded their revenue estimates, with sales performing well although Delek US Holdings' revenue growth is expected to trail that of the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Delek US Holdings could be a good candidate for more research.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Delek US Holdings analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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