Group 1 - Callodine Capital Management fully liquidated its position in Delek US Holdings, selling all 717,245 shares, which represented 1.57% of its assets, resulting in a position reduction valued at $15.19 million [2][7] - Delek US Holdings has seen its stock price increase by 60% over the past year, reaching $29.66, significantly outperforming the S&P 500, which rose about 16% in the same period [3][4] - The company reported a revenue of $10.67 billion and a net income loss of $514.90 million for the trailing twelve months (TTM) [4][10] Group 2 - Delek US Holdings operates as an integrated downstream energy company, involved in refining, logistics, and retail operations, supplying a variety of petroleum products across multiple channels [6][9] - The company generated revenue primarily through refining operations, logistics services, and retail fuel and merchandise sales, serving a diverse customer base including oil companies and the U.S. government [9][10] - Recent financial results showed a profit of $178 million in the last quarter, a significant improvement from a $76.8 million loss the previous year, largely due to a $280.8 million benefit from government exemptions [10][11]

Company Overview - Delek US Holdings, Inc. (NYSE:DK) is a diversified downstream energy company specializing in petroleum refining, asphalt, renewable fuels, and logistics [2]. Price Target and Analyst Rating - Mizuho raised its price target on Delek US Holdings from $45 to $51, indicating a significant upside potential of over 72% from the current share price [2]. - Mizuho maintained its 'Outperform' rating on DK shares [2]. Financial Performance - Delek US Holdings has surpassed estimates in each of its three quarters so far in FY 2025 [5]. - The company recently raised its EBITDA guidance to $500-$520 million for the year [5]. - The share price of DK has soared by over 60% since the beginning of 2025 [5]. Market Context - The energy sector experienced a challenging year in 2025, primarily due to oversupply in gas storage and the oil market, which drove prices to a multi-year low [3]. - Mizuho recommends reallocating risk toward oil exploration and production (E&P) with a selective bias toward gas stocks, driven by high demand from rising LNG exports and record power demand [4].

Core Insights - Delek US Holdings, Inc. (DK) has outperformed the Oil Refining & Marketing sub-industry and the broader Oils & Energy sector, with a share price increase of 69% over the past 12 months compared to 14.4% and 7.5% respectively [1][7] Company Overview - Delek is a significant player in the U.S. downstream oil and gas sector, producing gasoline, diesel, and jet fuel, while managing a logistics network for product transportation [3] - The company's financial performance is influenced by crude oil prices, refining margins, and market conditions, necessitating a balance between long-term growth potential and short-term volatility [3] Financial Performance - In Q3 2025, Delek paid $15.3 million in dividends and repurchased approximately $15 million of its shares, indicating a strong commitment to shareholder returns [5][7] - The company reported revenues of $2.89 billion for Q3 2025, reflecting a 5.11% year-over-year decline, which may signal challenges in volume or pricing within its core operations [14] Strategic Initiatives - The wholesale marketing business contributed around $70 million in Q3 2025, driven by initiatives from the Enterprise Optimization Plan (EOP) aimed at enhancing profitability through optimized logistics and strategic market adjustments [8] - Delek is positioned to benefit from a leading role in the Permian sour gas market, with ongoing projects expected to drive growth in the midstream segment [9] Market Outlook - Management has indicated a positive outlook for Q4 2025, highlighting a strong start from EOP initiatives and a high distillate yield system of 42%, which may allow the company to capitalize on favorable market conditions [10]

Core Insights - Delek US Holdings' Director Ezra Uzi Yemin executed a modest sale of 7,388 shares, representing 4.25% of his direct holdings prior to the transaction, which is significantly smaller than his previous sale of 132,612 shares [1][3] Transaction Summary - The transaction involved the sale of 7,388 shares valued at approximately $281,300, with a post-transaction holding of 166,580 shares worth around $6.4 million [2][4] Market Context - The sale occurred when Delek US Holdings shares were priced at approximately $38.08, and the company reported a one-year total return of 87.9% as of December 11, 2025 [5][7] Company Overview - Delek US Holdings operates as a diversified downstream energy company, focusing on refining, logistics, and retail operations across the southern United States, capturing value throughout the petroleum supply chain [9][11] Recent Performance - The company reported third-quarter results with adjusted earnings of $7.13 per share, exceeding expectations, leading to raised price targets from analysts despite a recent pullback in stock price from a high of $43.50 to around $34 [12] Regulatory Impact - A significant factor in Delek's stock performance is the EPA granting the company more than half of its pending small refinery exemptions, which could add at least $150 million annually to earnings, benefiting smaller independent refiners like Delek [10]

Company Overview - Delek US Holdings is an integrated downstream energy company with operations in refining, logistics, and retail, managing four refineries and a network of pipelines and convenience stores [6][10] - The company generates revenue through refining operations, logistics services, and retail fuel and merchandise sales, primarily serving customers in the southern and southwestern United States [10] Financial Performance - For the trailing twelve months (TTM), Delek reported revenue of $10.7 billion and a net income of -$514.9 million [4] - In the third quarter, Delek achieved a net income of $178 million and an adjusted EBITDA of $759.6 million, significantly improved from $70.6 million a year ago [11] - The stock price as of Thursday was $37.61, reflecting a 99% increase over the past year, outperforming the S&P 500's 13% gain during the same period [3][4] Investment Insights - GeoSphere Capital Management established a new position in Delek, acquiring 150,000 shares valued at approximately $4.8 million, representing 3.7% of its $131.7 million in U.S. equities [2][3] - The investment indicates confidence in Delek's improved fundamentals and cash-flow strength, despite the stock being down roughly 40% from pre-pandemic highs [11][12] - Delek's operational improvements, expanding margins, and rising free cash flow capacity present potential upside for investors, especially with expected SRE grants of around $400 million in the coming months [12]

Core Insights - Delek US Holdings, Inc. (DK) has significantly outperformed its peers and the broader Oils & Energy sector, with a year-to-date increase of over 106.6%, compared to a 19% gain in the refining sub-industry and a 6% rise in the overall sector [1][7][21] Company Performance - DK's strong performance is attributed to exceptional earnings in Q3, with adjusted earnings per share of $1.52 and adjusted EBITDA of $759.6 million, bolstered by a $280.8 million benefit from Small Refinery Exemptions (SRE) [9][21] - The company anticipates approximately $400 million in cash inflow from SRE monetization over the next six to nine months, which will enhance financial flexibility and shareholder value [10][21] - Delek Logistics Partners (DKL), a subsidiary of DK, has raised its full-year 2025 EBITDA guidance to between $500 million and $520 million, indicating strong performance and growth potential [11] Market Position and Opportunities - DK is well-positioned in the U.S. downstream sector, producing essential fuels and operating a logistics network that supports the national fuel supply chain [3][4] - The company is capitalizing on opportunities in the Delaware Basin, leveraging its first-mover advantage in sour gas solutions, which is expected to drive further growth [12][21] Challenges and Risks - The company's refining business is exposed to cyclical and volatile refining margins, which could impact profitability despite strong operational execution [15][20] - Execution risks are present in midstream growth initiatives, particularly related to the ramp-up of new assets like the Libby 2 plant [17][20] - DK's consolidated net debt stands at $2.55 billion, which may limit financial flexibility during downturns and expose the company to risks associated with rising interest rates [19][20]

Core Insights - Delek US Holdings, Inc. (DK) reported third-quarter 2025 adjusted earnings per share of $1.52, significantly exceeding the Zacks Consensus Estimate of 28 cents, and showing a substantial improvement from the adjusted loss of $1.45 in the same quarter last year, driven by enhanced performance across segments and an 18.1% reduction in operating expenses [1][2][8] Financial Performance - Net revenues decreased by 5.1% year over year to $2.9 billion, primarily due to lower revenues from the refining segment, but still surpassed the Zacks Consensus Estimate by $177 million [2] - Adjusted EBITDA for the quarter was $759.6 million, a sharp increase from $70.6 million reported a year earlier, and also exceeded estimates by $177 million [2] - Total operating expenses fell by approximately 18.1% year over year to $2.6 billion, with capital program expenditures amounting to $90.6 million [8] Segment Performance - The refining segment achieved an adjusted EBITDA profit of $696.9 million, a significant rise from the $10.2 million profit in the prior-year quarter, surpassing profit estimates of $3.1 million [4][11] - The logistics segment reported adjusted EBITDA of $131.5 million, up from $106.1 million in the year-ago quarter, driven by recent acquisitions and higher wholesale margins, also beating estimates of $85.2 million [7][11] Dividends and Share Repurchase - The board of directors approved a regular quarterly dividend of 25.5 cents per share, to be paid on November 17, 2025, to shareholders of record as of November 10, 2025 [3] - During the same period, the company repurchased approximately $15 million worth of its common shares and distributed $15.3 million in dividends [3][11] Future Guidance - The company anticipates a strong close to the fourth quarter, with expected operating expenses between $205 million and $220 million, and general and administrative expenses of $52 million to $57 million [12] - Projected crude throughput is expected to remain healthy, ranging from 252,000 to 284,000 barrels per day [13] - For 2025, the company expects improved cash-flow visibility, targeting at least $180 million in annual run-rate improvement under the Enterprise Optimization Plan, and anticipates receiving about $400 million from the monetization of historical Small Refinery Exemption credits [14]

Core Insights - Delek US Holdings, Inc. reported third-quarter sales of $2.887 billion, exceeding analyst expectations of $2.763 billion [1] - The company posted adjusted earnings of $7.13 per share, a significant improvement from a loss of $1.45 per share in the same quarter last year [1] Financial Performance - The strong performance in the third quarter is attributed to effective EOP (End of Period) contributions, which have exceeded previous guidance [2] - Delek US's free cash flow generation is expected to improve significantly in both the short and long term due to clarity on SREs (Strategic Resource Enhancements) [2] Market Position and Future Outlook - Delek US is strengthening its position in the Permian basin, with a raised guidance for processing plant contributions to $500 – $520 million [2] - The company is making progress on its midstream assets, with ongoing AGI (Asset Growth Initiatives) and increasing economic separation from DK [2] Analyst Ratings and Price Targets - Wells Fargo analyst Sam Margolin maintained an Overweight rating on Delek US and raised the price target from $43 to $53 [5] - Scotiabank analyst Paul Cheng maintained a Sector Perform rating and increased the price target from $33 to $40 [5]

Financial Performance - Consolidated net income for Q3 2025 was $194.8 million, compared to a net loss of $67.5 million in Q3 2024, with net income attributable to Delek at $178.0 million or $2.96 per basic share [266]. - Net revenues for Q3 2025 were $2,887.0 million, a decrease of $155.4 million or 5.1% from $3,042.4 million in Q3 2024, primarily due to a 7.1% decrease in the average price of U.S. Gulf Coast gasoline [268]. - Segment EBITDA attributable to Delek for Q3 2025 was $566.1 million, compared to $81.4 million in Q3 2024, indicating significant operational improvement [262]. - Refining margin for Q3 2025 was $616.7 million, an increase from $165.5 million in Q3 2024, reflecting improved refining performance [262]. - EBITDA increased by $451.3 million, or 3525.8%, in Q3 2025 compared to Q3 2024, primarily due to an increase in refining margin [319]. Operational Highlights - The refining segment reported higher margins in Q3 2025 compared to Q2 2025 and Q3 2024, driven by increased crack spreads [203]. - The refining segment has a combined nameplate capacity of 302,000 bpd as of September 30, 2025, with individual capacities of 75,000 bpd, 80,000 bpd, 73,000 bpd, and 74,000 bpd across four refineries [223]. - Total sales volume of refined products averaged 317,587 bpd in Q3 2025, up from 309,175 bpd in Q3 2024, representing a 2.9% increase [303]. - Total production averaged 309,739 bpd in Q3 2025, compared to 303,882 bpd in Q3 2024, indicating a growth of 1.4% [303]. - Crude oil throughput utilization reached 100.6% based on nameplate capacity in Q3 2025, up from 97.8% in Q3 2024 [303]. Cost and Expenses - Cost of materials and other for Q3 2025 was $2,165.7 million, a decrease of $623.0 million or 22.3% from $2,788.7 million in Q3 2024, driven by a decrease in crude oil feedstock costs [269]. - Operating expenses for Q3 2025 increased to $231.3 million, an increase of $46.2 million or 25.0% compared to $185.1 million in Q3 2024, primarily due to increased sales volume and acquisition-related costs [271]. - General and administrative expenses for Q3 2025 were $76.8 million, an increase of $6.4 million or 9.1% from $70.4 million in Q3 2024, driven by incentive compensation [273]. - Total operating costs and expenses for Q3 2025 were $2,591.3 million, compared to $3,164.3 million in Q3 2024, reflecting a decrease in overall costs [270]. Strategic Initiatives - The enterprise optimization plan (EOP) aims to improve financial health by reducing general and administrative expenses, operating expenses, and interest expenses [205]. - The company plans to execute strategic initiatives that may include monetizing its investment in Delek Logistics to unlock value [230]. - Delek is focused on identifying investment opportunities that fit its sustainability view, including strategic investments in renewables or carbon capture [230]. - The company continues to focus on operational excellence, financial strength, and strategic initiatives to enhance scale and diversify revenue streams [207]. Acquisitions and Investments - Delek Logistics acquired Gravity Water Intermediate Holdings LLC for a total consideration of $300.8 million, consisting of $209.3 million in cash and 2,175,209 common units [209]. - The El Dorado Purchase Agreement involves a cash consideration of $25.0 million for the related El Dorado rail facility assets, set to close on January 1, 2026 [214]. - The acquisition of Gravity is synergistic with Delek's recent acquisition of H2O Midstream, enhancing integrated crude and produced water services [231]. Shareholder Returns - As of September 30, 2025, Delek returned $106.1 million to shareholders through dividends and share buybacks [206]. - During the nine months ended September 30, 2025, Delek repurchased 3,254,403 shares for a total of $59.4 million, with $484.2 million remaining under the stock repurchase program [231]. - The company approved a quarterly cash dividend of $0.255 per share on October 29, 2025 [339]. Liquidity and Capital Structure - Total liquidity as of September 30, 2025, amounted to $2,304.6 million, including $1,673.7 million in unused credit commitments and $630.9 million in cash [339]. - As of September 30, 2025, total cash and cash equivalents were $630.9 million, with total long-term indebtedness of approximately $3,177.3 million [349]. - The company has the ability to incur an additional $400.0 million of secured debt under the Delek Term Loan Credit Facility [341]. - The company’s total unused credit commitments or borrowing base availability under revolving credit facilities was approximately $1,673.7 million [349]. Market Conditions - The near-term economic outlook remains uncertain due to geopolitical instability and commodity market volatility [205]. - The company faces challenges from regulatory costs and energy price volatility, particularly affecting smaller refineries [299]. - The volatility in RIN prices continues to affect refining margins, with significant cash outflows for additional RINs purchases [249].

Financial Data and Key Metrics Changes - Delek reported adjusted EPS of $1.52 and adjusted EBITDA of approximately $319 million for Q3 2025, reflecting strong momentum and progress from the enterprise optimization plan [3][14] - Net income for the quarter was $178 million, or $2.93 per share, while adjusted net income was $434 million, or $7.13 per share, with adjusted EBITDA reaching approximately $760 million [14][15] - Cash flow from operations was $44 million, but adjusted for working capital, it improved to $150 million, a $202 million increase compared to Q3 last year [16] Business Line Data and Key Metrics Changes - The supply and marketing segment contributed approximately $130 million in the quarter, with wholesale marketing generating about $70 million [12][13] - The logistics segment delivered approximately $132 million in adjusted EBITDA, marking an $11 million increase over the previous record [15] - The enterprise optimization plan (EOP) contributed approximately $60 million to the P&L in Q3, leading to an increase in the annual run rate EOP improvement target from $150 million to at least $180 million [5][9] Market Data and Key Metrics Changes - The refining system achieved record throughput, with Krotz Springs setting a record high [11] - Total throughput in Tyler was 76,000 barrels per day, with a production margin of $11.32 per barrel [11] - El Dorado's throughput was approximately 83,000 barrels per day, with a production margin of $7.43 per barrel [12] Company Strategy and Development Direction - The company is focused on safe and reliable operations, with a strong operational quarter across its refining system [4] - Delek is committed to a disciplined capital allocation framework, having paid approximately $15 million in dividends and repurchased $15 million of its shares [9] - The company is optimistic about the future, expecting to finish 2025 strong and build on current momentum [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the monetization of granted RINs, expecting approximately $400 million in profits over the next six to nine months [6][24] - The company anticipates continued strength in distillate cracks and a positive outlook for Q4 [47] - Management emphasized the importance of the EOP as a core strength and a continuous improvement culture within the organization [5][40] Other Important Information - The company has increased its full-year EBITDA guidance for Delek Logistics to between $500 million and $520 million [4][9] - The EPA's approval of several SRE petitions is seen as a critical part of the current administration's energy policy, with implications for future profitability [6][24] Q&A Session Summary Question: Refining throughput guidance and RVO risk - Management clarified that they expect to qualify for 100% of SREs for 2025 and are confident in the legal backing for their petitions [20][25] Question: Clarification on total adjusted refining margin - The reported total adjusted refining margin of $688.6 million includes SRE benefits, while gross margins reported do not [29][30] Question: Impact of Permian Sour Gas opportunity - Management highlighted the strategic advantage of being early in the Permian Sour Gas market and the need for rapid solutions for sour gas [32][35] Question: Timing of SRE cash impact on balance sheet - Management expects to see cash from SRE monetization in the next six to nine months [37][38] Question: Drivers of recent EOP cash savings guidance increase - Management emphasized that EOP is a lifestyle across the organization, with ongoing initiatives leading to improved margins and cash flow [39][40] Question: Strength of wholesale and supply results - Management noted that structural improvements in the wholesale business are a significant part of the EOP progress [43][45] Question: Sensitivity of results to Group 3 pricing - Management stated that the enterprise optimization plan aims to reduce dependence on specific market conditions, leading to more structural improvements [58][59] Question: Monetization of $400 million in RINs - Management confirmed that $400 million is a solid number to model for future cash flow from RINs [60][61]