DKL - Delek Logistics Partners cut to Sell at Citi after recent run-up
2023-06-28 12:25:20 ET
Delek Logistics Partners ( NYSE: DKL ) -1.9% in Wednesday's trading as Citi downgraded to Sell from Neutral with a $47 price target, citing valuation after the stock's 30%-plus rise from recent lows, and saying the company has above-average leverage and likely moderating growth.
Delek Logistics ( DKL ) trades at a greater than 2x premium to its closest peer and boasts one of the highest multiples within Citi's coverage, but such a premium multiple is not warranted, analyst Douglas Irwin wrote.
The company has above-average leverage of greater than 4x and a bottom-quartile free cash flow yield below 10%, and Irwin expects moderating growth moving forward, as peer-leading 2023 EBITDA growth of 25% largely is driven by M&A and growth should moderate to ~3% in 2024, Irwin said.
More on Delek Logistics Partners:
- Financial and valuation comparison to sector peers
- Analysis: Delek Logistics Partners: A Dividend King's Royal Midstream Cousin
- Stock price return: Up 23% YTD, up 10.5% in the past 12 months
For further details see:
Delek Logistics Partners cut to Sell at Citi after recent run-up