Delek US Holdings: Iran War Benefits Justify The Rally (Downgrade)

Seeking Profits5.37K FollowersFollow5ShareSavePlay(9min)Comment(1)SummaryDelek US Holdings has surged nearly 200% over the past year, driven by regulatory relief and surging crack spreads from geopolitical disruptions.DK benefits from EPA small refinery exemptions and a favorable balance sheet, with $615 million in cash, $889 million in debt, and a valuable DKL stake.I estimate DK’s fair value at $53, reflecting both a one-time windfall from the Iran War and normalized free cash flow, implying ~20% upside.While no longer a "Strong Buy" after a 50% rally, DK remains a "Buy" with expectations to rally past $50 and ongoing share buybacks. Justin Paget/DigitalVision via Getty Images Shares of Delek US Holdings (DK) have been an extraordinary performer over the past year, nearly tripling in value. The company has been a primary beneficiary of an easier regulatory environment for smaller refineries, as the EPA granted a backlog of exemptions (“SRE”) fromThis article was written bySeeking Profits5.37K FollowersFollowOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.