DELEK US HOLDINGS, INC. (DK): what the price assumes

boothcheck covers DELEK US HOLDINGS, INC. (DK) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/DK

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.9% sits below it).

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by earnings-power and relative-multiple and growth-DCF value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Earnings, Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.

Per-Model Detail (n=14)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Four refineries with a combined nameplate crude throughput capacity of 302,000 barrels per day sit alongside a separately listed pipeline partnership that Delek controlled at about 63.0% as of June 30, 2026.
• The binding constraint is interest, which the 10-K reports at $345.3 million in the year ended December 31, 2025, compared to $313.0 million for year ended December 31, 2024, more than the company earned at the operating line over the trailing year.
• Second-quarter results land August 5, 2026, the first clean quarter after the Big Spring turnaround that took volumes out of the March period.

Bull Case

The objection to Delek is arithmetic, and it is a fair one. Interest cost the company $345.3 million last year, which is more than the whole enterprise earned at the operating line over the trailing twelve months, and net income for the period was negative. Any argument for the equity has to get past that sentence before it gets anywhere.

Here is what the sentence leaves out. Refining is at a low point in its cycle and the pipeline business is not. The logistics segment runs roughly 567 miles of pipeline and about 11.3 million barrels of active shell capacity, along with gathering, water disposal and recycling operations in the Delaware Basin of New Mexico, the Midland Basin of Texas and the Bakken of North Dakota. Those assets earn fees on volume rather than on the difference between two commodity prices, and a good share of that volume comes from Delek's own refineries under contract, which the filing describes as multiple service agreements with our logistics segment which, among other things, require the refining segment to pay terminalling and storage fees based on the throughput volume.

The separation between those two businesses is not a thought experiment. Delek Logistics Partners is a publicly traded master limited partnership with its own units and its own market, and Delek owned about 63.0% of it including the general partner interest as of June 30, 2026. Management has been running what it calls its "sum of the parts" effort for some time, and the logistics arm has been the vehicle: it closed the Gravity acquisition, and the Delek Permian Gathering purchasing and blending activities were transferred into the partnership on May 1, 2025.

Cost work has been running underneath all of it. The company describes an enterprise optimization plan that includes leaner costs including lower general and administrative expenses, lower operating expenses and lower interest expense, and the 10-K credits the combination of those margin enhancements and the small refinery exemptions granted with supporting EBITDA growth and improved cash flow through the year.

There is also a geographic quirk worth understanding, because it is specific to these assets rather than to refining generally. Delek's system sits close to where West Texas crude is produced, and the filing spells out the consequence: a widening of the WTI Cushing less WTI Midland spread will favorably influence the operating margin for our refineries. When Permian barrels are cheap relative to the pipeline hub, this company captures more of that gap than a coastal refiner does.

Finally, look at what has actually been returned. The share count has fallen at roughly 4.9% a year over the four years to March 2026, which is a genuine retirement of stock rather than a stated intention, and on July 23, 2026 the board approved a quarterly dividend of $0.255 a share payable August 10. A company shrinking its share count through the worst part of its cycle is telling you something about how it reads its own assets.

Bear Case

The competitors are the problem, and the company says so in its own risk section. Refiners with larger capitalization, larger and more complex refineries and greater resources are, in Delek's own words, better able to withstand volatile market conditions relating to crude oil and refined product pricing, compete on the basis of price, obtain crude oil in times of shortage, and withstand weather disruptions. Put numbers on that. MPC ran $135.4 billion of revenue over the trailing year and converted 6.7% of it into operating income. VLO ran $124.8 billion at 4.7%. Even PARR, at $7.5 billion of revenue, converted 8.2%. Delek's trailing operating margin is 2.3% on $10.7 billion. Complexity is what lets a refinery buy the cheap, sour, difficult barrels and sell clean products; without it you are buying closer to what everyone else buys and selling into the same market.

Scale also decides who survives a bad stretch, and Delek's balance sheet is where the pressure lands. Net debt of roughly 2.56 billion dollars sits against liquid assets near 624 million dollars, which is a thin ratio in a business whose earnings can swing by hundreds of millions between quarters. Measured against trailing operating income, net debt is about 10.3 times operating profit. The direction is the uncomfortable part: interest expense rose to $345.3 million in 2025 from $313.0 million in 2024, an increase of 10.3%, in a year when the operating line was not rising to meet it.

The consolidated financial statements also flatter what belongs to the common shareholder. Delek consolidates Delek Logistics in full while owning roughly 63.0% of it, so a portion of the pipeline income sitting in the reported totals is owed to the partnership's public unitholders. The March 2026 quarter shows the mechanism plainly: comprehensive loss was $190.9 million in total, of which $10.4 million of comprehensive income was attributable to non-controlling interests, leaving a loss attributable to Delek of $201.3 million. The outside owners were made whole first. The parent absorbed the rest and then some.

What today's price asks for compounds that. The market is paying roughly 25 times what the company earns at the operating line, which implies operating profit growing at about 5.3% a year for five years. That is not an extreme demand on its own, and the multiple sits in the upper half of its peer range rather than at the top of it. The fragility is in how sensitive the answer is: a single percentage point of extra required return moves the implied growth requirement by many percentage points, which is what happens when the earnings base is small relative to the enterprise value it has to support.

The demand side has a slow leak too. The filing points at fuel economy standards set to tighten at a rate of 8% per year, rather than the 1.5% set previously for model years 2024 through 2026, and pairs that with the potential electrification of the vehicle fleet and mandated increases in renewable fuel use as forces that could result in decreasing demand for petroleum fuels. None of that changes next quarter. All of it changes the terminal value a five-year projection quietly assumes.

There is a real floor, and it is worth naming precisely because it is unusually large here. Roughly 424 million dollars of equity interests sit outside the operating segments, a little over 11% of market value, and the refineries and pipelines are hard assets rather than goodwill. That bounds the downside. It does not fund the interest bill, which is the thing that actually has to be paid every quarter regardless of what the crack spread does.

Valuation

Twenty-five times operating income is a software multiple, and Delek runs refineries. The explanation is not that the market has lost its mind but that the denominator is a trough figure: the company earned relatively little at the operating line over the trailing year, so the multiple on that number looks enormous. Translated into a requirement, today's price implies operating profit growing at roughly 5.3% a year for about five years. Stated that way it sounds ordinary, and against this company's own recent record it is.

The peer reading is less comfortable. Measured against the other refiners it is grouped with, the multiple sits in the upper half of the range, so this is not the cheapest way to own the same cycle. What keeps the overall read within the bounds of plausible growth rather than beyond them is that the required pace is modest, not that the starting multiple is low.

The methods themselves divide in a way that is easy to misread. The forward cash-flow approaches land essentially on today's price, with the price about 1% above where they cluster. The earnings-power approaches land far under it, with the price roughly 95% above them. And the peer-multiple approaches appear to say the stock is deeply cheap, because they multiply $10.7 billion of revenue by a sales multiple drawn from a broad energy sample. A refiner books the crude it purchases inside that revenue line, so a sales multiple built from companies with different revenue composition is measuring accounting rather than worth. Set that family aside and the honest picture is two methods, one of which reaches the price and one of which does not.

The mechanics inside the cash-flow methods deserve attention because they are more forgiving than they look. The perpetual-growth version reaches today's price while carrying a negative growth input drawn from recent history, which tells you the free cash flow base is doing the work rather than any growth assumption. The exit-multiple version holds today's enterprise-value-to-EBITDA multiple flat as its base case, compressing it in the bear scenario and expanding it in the bull. Both get near the quote. Neither needs a recovery to do so.

The filing-sourced input the whole exercise rests on is capacity. Four refineries at Tyler, Big Spring, El Dorado and Krotz Springs carry a combined nameplate crude throughput capacity of 302,000 barrels per day, and the logistics segment adds roughly 567 miles of pipeline and about 11.3 million barrels of active shell capacity. That is what an owner is buying: throughput and tankage, priced today at a moment when the spread between the two is unusually thin.

Solvency is where the argument ends rather than where it decorates. Net debt near 2.56 billion dollars sits against liquid assets of about 624 million dollars, and there is no reported burn. Net interest ran $345.3 million through 2025, a fixed charge that arrives whether or not the crack spread cooperates, and it leaves limited room to absorb another weak year. Against that, the share count has come down roughly 4.9% a year over four years and about 424 million dollars of equity interests sit outside the operating segments. The balance sheet neither rescues the thesis nor sinks it. It sets the deadline.

Catalysts

Second-quarter results are scheduled for August 5, 2026. The March quarter was distorted by a turnaround at the Big Spring refinery, which reduced sales volumes in the refining segment, so the June quarter is the first look at the system running without that drag.

The finance function changed hands at the start of the month. On June 26, 2026 the boards of Delek US and of the general partner of Delek Logistics approved executive changes effective July 1: Mark Hobbs moved from Executive Vice President and Chief Financial Officer to Executive Vice President, Logistics, and Robert Wright was appointed Chief Financial Officer of the company while remaining Chief Financial Officer of the partnership. Mohit Bhardwaj took on the New Energy business alongside strategy and investor relations. Putting the outgoing finance chief in charge of logistics, and leaving one person as chief financial officer of both entities, is an organisational shape worth reading alongside management's stated sum-of-the-parts intentions.

Capital return has a date attached. On July 23, 2026 the board approved a quarterly dividend of $0.255 per share, payable August 10 to holders of record on August 3. Sell-side sentiment moved in the same direction through July, with TD Cowen raising its price target to $76 from $58 on July 16, 2026. The street appears to be crediting a refining margin recovery that the trailing figures do not yet contain, which is the same gap this report has been describing from the other side.

Peer Cohorts (Per Segment, With Filing Citations)

Refining (reported)

• VLO (VALERO ENERGY CORP/TX)
• FY2025 10-K: …relating to transportation fuels regulated by low-carbon fuels regulations, policies, and standards. OUR OPERATIONS Our operations are managed through the following reportable segments: • our Refining segment, which includes the operations of our petroleum refineries, the associated activities to market our refined…
• FY2025 10-K: …separately. Operating performance is measured based on the operating income (loss) generated by the segment, which includes revenues and expenses that are directly attributable to the management of the respective segment. Intersegment sales are generally derived from transactions made at prevailing market rates. The…
• MPC (MARATHON PETROLEUM CORPORATION)
• FY2025 10-K: Table of Contents Item 2. Properties We believe that our properties and facilities are adequate for our operations and that our facilities are adequately maintained. See the following sections for details of our assets by segment. REFINING & MARKETING The table below sets forth the location and crude oil refining…
• FY2025 10-K: …fundamentals, as well as the U.S. refining industry's current structural advantages over the rest of the world, will support a constructive environment for U.S. refiners. Our Midstream segment contributed strong results and continued growth in 2025, benefitting from the expansion of its Permian to Gulf Coast natural…
• PSX (Phillips 66)
• FY2025 10-K: …volatility in the price and availability of raw materials, supply chain interruptions, material adverse changes in customer relationships including any failure of a customer to perform its obligations under agreements with us, and risks associated with worldwide or regional economic conditions. Competition Risks…
• FY2025 10-K: …to focus on Refining performance, targeting an annual clean product yield of greater than 86%, crude oil capacity utilization rates higher than industry average and continuing to improve our competitive cost structure. During 2025, our worldwide refining crude oil capacity average utilization rate was 94% for 2025,…
• PBF (PBF ENERGY INC.)
• FY2025 10-K: …refiners that import products into the United States and with producers and marketers in other industries supplying alternative forms of energy and fuels to satisfy the requirements of industrial, commercial and individual consumers. Some of our competitors have expanded the capacity of their refineries and…
• FY2025 10-K: …of our competitors have larger and more complex refineries, and may be able to realize lower per-barrel costs or higher margins per barrel of throughput. Several of our principal competitors are integrated national or international oil companies that are larger and have substantially greater resources than we do and…
• DINO (HF SINCLAIR CORPORATION)
• FY2025 10-K: …any of the crude oil feedstocks used at our refineries. Though we license our brand, as of December 31, 2025, we do not currently own or operate retail outlets and therefore are dependent upon others for outlets for our refined products. Certain of our competitors, however, obtain a portion of their feedstocks from…
• FY2025 10-K: …refineries and Asphalt. The Renewables segment includes the operations of the Artesia, Cheyenne and Sinclair RDUs and the Artesia PTU. The Marketing segment includes branded fuel sales. The Lubricants & Specialties segment includes the operations of our Petro-Canada Lubricants, Red Giant Oil and Sonneborn businesses…
• PARR (Par Pacific Holdings, Inc.)
• FY2025 10-K: 6.6 million in environmental expenses, and $5.7 million in other expenses, and an increase of $4.0 million in third party revenue. These improvements were partially offset by an $11.8 million in rent expense, $5.5 million related to lower throughput, and $4.1 million of reduced gross margin related to the Wyoming…
• FY2025 10-K: …control, including the global supply and demand for crude oil and renewable feedstocks, as well as gasoline and other conventional and renewable refined products, which are subject to, among other things: • changes in the global economy and the level of foreign and domestic production of crude oil and refined…

Logistics (reported)

• PBF (PBF ENERGY INC.)
• FY2025 10-K: Northeast, Midwest, Gulf Coast, and West Coast of the United States, as well as in other regions of the United States, Canada, and Mexico, and is able to ship products to other international destinations. Logistics The Company's Logistics segment is comprised of PBFX, a partnership, formed to own or lease, operate,…
• FY2025 10-K: …that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. As described in "Note 19 - Segment Information", the Company's business consists of the Refining Segment and Logistic Segment. The following table provides information relating to the Company's…
• CVI (CVR ENERGY, INC)
• FY2025 10-K: | 24 Table of Contents system inventory, local and regional market conditions, inflation, operating levels of other refineries, regional and global supply of and demand for crude oil, gasoline, diesel, and other feedstocks and refined products, which supply and demand is subject to volatility based on, among other…
• FY2025 10-K: …the product is delivered. The payment terms depend on the product and type of contract, but generally require customers to pay within 30 days or less, and do not contain significant financing components. Any pass-through finished goods delivery costs reimbursed by customers are reported in Net sales, while an…
• DINO (HF SINCLAIR CORPORATION)
• FY2025 10-K: …any of the crude oil feedstocks used at our refineries. Though we license our brand, as of December 31, 2025, we do not currently own or operate retail outlets and therefore are dependent upon others for outlets for our refined products. Certain of our competitors, however, obtain a portion of their feedstocks from…
• FY2025 10-K: …prices, if available, or upon the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants and observed market earnings multiples of comparable companies. Revenue Recognition: Revenues from refined products,…
• PARR (Par Pacific Holdings, Inc.)
• FY2025 10-K: …convenience stores at all of our retail fuel outlets in Washington and Idaho. We use our proprietary "nomnom" brand at both the fueling facilities and stores. Our cardlock locations on Kauai are branded Kauai Automated Fuels ("KAF"). 4 Competition Competitive factors that affect our retail performance include product…
• FY2025 10-K: …transferred between the Hawaii refinery and the IES Downstream, LLC ("IES") storage facility located approximately 2 miles away. From the Hawaii refinery, we distribute refined products through our logistics network of pipelines, trucks, leased barges, terminals, and storage facilities throughout the islands of Oahu,…
• VLO (VALERO ENERGY CORP/TX)
• FY2025 10-K: …• the effect, impact, potential duration or timing, or other implications of global geopolitical and other conflicts and tensions, and government and other responses thereto; • future Refining segment margins, including gasoline and distillate margins, and differentials; • future Renewable Diesel segment margins; •…
• FY2025 10-K: …of each of our reportable segments. OUR COMPREHENSIVE LIQUID FUELS STRATEGY Overview We strive to manage our business to responsibly meet the world's growing demand for reliable and affordable energy. We believe that liquid transportation fuels-both petroleum-based and low-carbon-help meet that demand, and we expect…
• MPC (MARATHON PETROLEUM CORPORATION)
• FY2025 10-K: …the quantity and availability of our refining logistics assets. A majority of the crude oil and refined product shipments on our pipelines and marine vessels and the refined product throughput at our terminals serve our Refining & Marketing segment and our refining logistics assets and fuels distribution services are…
• FY2025 10-K: …declines during the fall and winter months. As with crude oil, other transportation alternatives and system maintenance levels influence refined product movements. Our Midstream segment also gathers, treats, processes and transports natural gas and transports, fractionates, stores and markets NGLs. NGL and natural…
• PSX (Phillips 66)
• FY2025 10-K: …provided by our Midstream segment may be negatively impacted. The natural gas and NGL gathered, processed, transported, sold and stored by us is delivered into pipelines for further delivery to end-users, including fractionation facilities. Our revenues and cash flows can also increase or decrease as the price of…
• FY2025 10-K: 4 The following table depicts our ownership interest in terminal and storage facilities included in our Transportation business at December 31, 2025: Facility Name Location Commodity Handled Interest Gross Storage Capacity (MBbl) Gross Rack Capacity (MB/D) Albuquerque New Mexico Refined Petroleum Products 100 % 274 20…
• CLMT (Calumet, Inc. /DE)
• FY2025 10-K: …in the Upper Midwest and East Coast regions of the U.S. and in Canada. The terminal includes a tank farm with 90 tanks having aggregate storage capacity of approximately 150,000 barrels, supplying lube base oils, food grade white oils and aliphatic solvents, as well as viscosity index additives and tackifiers. We use…
• FY2025 10-K: …than usual WCS-WTI spreads in the fourth quarter, but is beginning to experience marginal benefit from the widening of heavy crude oil spreads in response to recent market and geopolitical events. The facility remains strategically advantaged due to its local access to cost-advantaged Canadian conventional crude oil,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.