Financial Data and Key Metrics Changes - The company reported approximately $107 million in quarterly adjusted EBITDA for Q3 2024, an increase from $98.2 million in the same period of 2023 [5][8] - Distributable cash flow (DCF) as adjusted was $62 million, with a DCF coverage ratio of approximately 1.1x, expected to improve to above 1.3x in the second half of 2025 [8] Business Line Data and Key Metrics Changes - Gathering and Processing segment adjusted EBITDA was $55 million, up from $52.9 million in Q3 2023, driven by higher throughput from Permian Basin assets and contributions from H2O [9] - Wholesale Marketing and Terminalling adjusted EBITDA decreased to $24.7 million from $28.1 million due to lower wholesale margins [9] - Storage and Transportation adjusted EBITDA increased to $19.4 million from $17.9 million, attributed to higher storage and transportation rates [9] - Investment in pipeline joint venture segment contributed $15.6 million, up from $9.3 million in Q3 2023, primarily from Wink to Webster contributions [9] Market Data and Key Metrics Changes - The company is experiencing strong performance in the Permian Basin, with ongoing expansion projects and acquisitions enhancing its market position [5][6] Company Strategy and Development Direction - The company is focused on organic and inorganic growth opportunities, with recent acquisitions aimed at enhancing service offerings in the Midland Basin [5][6] - A quarterly distribution increase to $1.10 per unit was approved, reflecting the company's commitment to value creation for unitholders [6] - The capital program for Q3 was $65.2 million, with significant allocation towards the new gas processing plant [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, citing strong performance and strategic acquisitions as key drivers [5][6] - The company is managing liquidity and leverage prudently, with approximately $780 million of liquidity post-equity offering [7] Other Important Information - The company is on track to complete the expansion of its processing plant on time and on budget in the first half of 2025, with additional opportunities in sour gas treatment [6][14] Q&A Session Summary Question: Progress on the processing plant and sour gas opportunities - Management confirmed that the processing plant is progressing well and is on schedule for completion in the first half of 2025, with exciting opportunities in sour gas treatment [12][13][14] Question: Trends in Midland's volumes and acreage dedication - Management noted a slight decrease in volumes but expects to see growth in the future, with new acreage dedication enhancing their position in the Midland area [16][18] Question: Integration of H2O midstream acquisition - Management reported successful integration of H2O midstream, enhancing bundling sales opportunities and operational synergies [20][21] Question: Capital allocation strategy regarding distribution growth and debt payment - Management emphasized a balanced approach to growth opportunities, liquidity, leverage, and distribution coverage, aiming for sustainable growth [22][23][24]

Financial Performance - Net income attributable to limited partners for Q3 2024 was $33.7 million, or $0.71 per diluted common limited partner unit, compared to $34.8 million, or $0.80 per diluted common limited partner unit in Q3 2023[1] - Adjusted EBITDA for Q3 2024 reached a record $106.8 million, up 9% year over year from $98.2 million in Q3 2023[1] - Distributable cash flow, as adjusted, was $62.0 million in Q3 2024, slightly up from $61.4 million in Q3 2023[1] - Net income for Q3 2024 was $33,674, a decrease of 3.3% from $34,825 in Q3 2023[17] - Adjusted EBITDA for Q3 2024 increased to $106,829, up from $98,241 in Q3 2023, representing an increase of 8.1%[17] - Distributable cash flow for Q3 2024 was $61,959, compared to $61,396 in Q3 2023, reflecting a slight increase of 0.9%[18] - Total revenue for Q3 2024 was $214,070, a decrease of 6.5% from $228,000 in Q3 2023[19] - Operating income decreased to $31,808,000 for the three months ended September 30, 2024, compared to $62,554,000 in the prior year, a decline of 49.1%[16] - The company reported a net income of $107.380 million for the nine months ended September 30, 2023, compared to a net loss in the previous year[22] Cash Distribution and Coverage - The company declared a quarterly cash distribution of $1.100 per common limited partner unit, representing a 5.3% increase over Q3 2023 distribution of $1.045[2] - The distribution cash flow coverage ratio, as adjusted, was 1.1x, lower than the target of 1.3x due to timing effects[2] - Cash distribution per common limited partner unit increased to $1.095 for the three months ended September 30, 2024, compared to $1.045 in the same period of 2023, a rise of 4.8%[16] - The distributable cash flow coverage ratio for Q3 2024 was 0.94x, down from 1.35x in Q3 2023[18] - The company expects to continue increasing distributions in the future, maintaining a consistent growth policy[1] Debt and Liabilities - Total debt as of September 30, 2024, was approximately $1.89 billion, with a leverage ratio of approximately 4.15x[2] - Long-term debt increased to $1,894,257,000 as of September 30, 2024, compared to $1,673,789,000 at December 31, 2023, an increase of 13.2%[14] - Total liabilities increased to $2,005,831,000 as of September 30, 2024, compared to $1,804,115,000 at December 31, 2023, an increase of 11.1%[14] - Total current liabilities decreased to $69,582,000 as of September 30, 2024, from $90,590,000 at December 31, 2023, a reduction of 23.2%[14] Revenue and Segment Performance - Net revenues for the three months ended September 30, 2024, were $214,070,000, down 22.3% from $275,824,000 in the same period of 2023[16] - The company reported an increase in Adjusted EBITDA from the Gathering and Processing segment to $55.0 million in Q3 2024, up from $52.9 million in Q3 2023[3] - Segment EBITDA for the Gathering and Processing segment was $42,380, while the Wholesale Marketing and Terminalling segment reported $20,245 for Q3 2024[19] - The Gathering and Processing segment reported revenues of $270.053 million for the nine months ended September 30, 2023, compared to $143.992 million in 2022, a growth of 87.5%[22] - The Wholesale Marketing and Terminalling segment generated revenues of $361.808 million for the nine months ended September 30, 2023, up from $186.345 million in the previous year, marking a 93.7% increase[22] Capital Expenditures - Capital spending for Q3 2024 was $65,198, significantly higher than $1,910 in Q3 2023[19] - The company plans to invest $53.4 million in capital spending related to a new gas processing plant in 2024[24] - Capital spending for the nine months ended September 30, 2023, totaled $90.550 million, compared to $68.628 million in 2022, indicating a 31.9% increase[24] Cash Flow and Operating Activities - Net cash provided by operating activities was $24,944,000 for the three months ended September 30, 2024, down from $46,828,000 in 2023, a decrease of 46.8%[15] - The company’s net cash provided by operating activities for Q3 2024 was $24,944, down from $46,828 in Q3 2023[17] - Cash and cash equivalents at the end of the period were $7,317,000, up from $4,182,000 in the same period of 2023, an increase of 74.1%[15] Acquisitions and Growth Opportunities - The acquisition of H2O Midstream was completed during Q3 2024, enhancing growth opportunities in the Delaware Basin[1] - Income from equity method investments rose to $15.6 million in Q3 2024, compared to $9.3 million in Q3 2023, driven by the W2W dropdown[6] - Average throughput for the Gathering and Processing segment was 125,123 bpd for the nine months ended September 30, 2023, compared to 111,973 bpd in 2022, an increase of 11.4%[25]

Core Viewpoint - Delek Logistics Partners, L.P. (DKL) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which significantly influences stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Delek Logistics Partners indicate an improvement in the company's underlying business, suggesting potential for stock price appreciation [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2024, Delek Logistics Partners is expected to earn $3.41 per share, reflecting a 5.6% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for the company has increased by 4.3%, indicating positive sentiment among analysts [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Delek Logistics Partners to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting strong potential for market-beating returns in the near term [10].

Core Insights - DKL Logistics LP is expanding its operations through acquisitions and diversifying its sales base, which is expected to increase EBITDA by at least 14% [2][6][7] Company Profile - DKL Logistics LP, based in Brentwood, Tennessee, is a publicly traded master limited partnership formed in 2012 by Delek US Holdings, Inc. to manage logistics and marketing assets for crude oil and refined products [3] - The company operates primarily in the southeastern United States and west Texas, supporting Delek's refining operations [3] Holdings and Operations - DKL's operations include gathering, transporting, and storing crude oil, as well as marketing and distributing refined products [4] - The company has a significant infrastructure, including a 200-mile gathering system and over 800 miles of transportation pipelines [5] Acquisitions and Expansion - On August 6, 2024, DKL announced the acquisition of Delek US's interest in the Wink to Webster pipeline, which is expected to enhance asset quality and diversify operations [6] - The acquisition is projected to increase third-party EBITDA contribution from 50% to 64% and diversify EBITDA sources across various segments [6][7] Financial Performance - DKL's Q2 2024 saw record EBITDA of $102.4 million, a 10% increase from Q2 2023, with a 9.7% growth in EBITDA and 11% growth in distributable cash flow [13][14] - The company reported a net income of $73.71 million for Q1-2 2024, reflecting a 6.43% increase year-over-year [14] Dividends - DKL recently increased its distribution from $1.07 to $1.09, marking the 46th consecutive quarterly increase, yielding 11.18% as of August 28, 2024 [15][16] Analyst Ratings and Price Targets - DKL received upgrades from Citigroup and Truist, with price targets of $45 and $46, respectively, indicating potential upside from the current price of $39 [28][29][31] Valuations - DKL is currently trading at a low Price/DCF ratio of 6.66X, significantly below midstream averages, suggesting potential undervaluation [32][34]

Core Insights - Three stocks with strong income characteristics and buy rankings are highlighted for investors to consider on August 26th [1] Group 1: Medical Properties Trust (MPW) - Medical Properties Trust is a self-advised real estate investment trust focused on acquiring and developing net-leased healthcare facilities [1] - The Zacks Consensus Estimate for its current year earnings has increased by 7.1% over the last 60 days [1] - The company has a dividend yield of 13.30%, significantly higher than the industry average of 4.54% [2] Group 2: NexPoint Real Estate Finance (NREF) - NexPoint Real Estate Finance is a real estate investment trust that invests in first mortgage loans, mezzanine loans, preferred equity, and alternative structured financings in commercial real estate [3] - The Zacks Consensus Estimate for its current year earnings has increased nearly 18.63% over the last 60 days [3] - The company has a dividend yield of 12.80%, compared to the industry average of 11.79% [4] Group 3: Delek Logistics Partners (DKL) - Delek Logistics Partners owns, operates, acquires, and constructs logistics and marketing assets for crude oil and refined products [4] - The Zacks Consensus Estimate for its current year earnings has increased nearly 4.3% over the last 60 days [4] - The company has a dividend yield of 11.2%, which is higher than the industry average of 7.2% [4]

Group 1: Stock Recommendations - Sumitomo Mitsui Financial Group, Inc. (SMFG) has a Zacks Rank 1 and a 19% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - Qifu Technology, Inc. (QFIN) also holds a Zacks Rank 1 with a 10.5% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] - Delek Logistics Partners, LP (DKL) maintains a Zacks Rank 1 and has seen a 4.3% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] Group 2: Valuation Metrics - Sumitomo Mitsui Financial Group has a price-to-earnings ratio (P/E) of 12.12 compared to 22.66 for the S&P, with a Value Score of B [1] - Qifu Technology has a P/E ratio of 5.39 compared to 22.66 for the S&P, and possesses a Value Score of A [2] - Delek Logistics Partners has a P/E ratio of 11.32 compared to 22.66 for the S&P, with a Value Score of A [3]

Core Insights - The article emphasizes the importance of a proven ranking system that focuses on earnings estimates and revisions to identify winning stocks [1] - Value investing is highlighted as a popular and successful strategy across various market conditions, relying on traditional analysis of key valuation metrics [2] - The Zacks Rank and Style Scores system are tools for investors to identify high-quality value stocks, particularly those with high Zacks Ranks and "A" grades for Value [3] Company Analysis: Delek Logistics Partners (DKL) - Delek Logistics Partners currently holds a Zacks Rank of 2 (Buy) and an "A" grade for Value, indicating strong potential [4] - The stock has a P/E ratio of 9.90, significantly lower than the industry average of 12.01, suggesting it may be undervalued [4] - DKL's Forward P/E has fluctuated between 9.66 and 14.55 over the past 52 weeks, with a median of 11.73, indicating variability in market perception [4] - The company has a P/CF ratio of 7.66, which is also below the industry average of 8.63, further supporting the notion of undervaluation [5] - Over the past 12 months, DKL's P/CF has ranged from 6.84 to 9.30, with a median of 7.72, reflecting its cash flow strength [5] - Overall, the metrics suggest that Delek Logistics Partners is likely undervalued and stands out as one of the strongest value stocks in the market [6]

Core Viewpoint - Delek Logistics Partners has consistently increased its cash distributions to investors, showcasing a strong financial foundation and growth potential in the midstream sector [2][11]. Group 1: Financial Performance - The company recently achieved its 46th consecutive quarterly distribution increase, with a nearly 2% raise pushing its yield close to 11% [2]. - Delek Logistics ended the second quarter with a distribution coverage ratio of 1.32 times, indicating a healthy ability to cover its distribution payments [5][7]. - The leverage ratio improved to 3.81 at the end of the second quarter, down from 4.34 at the end of the previous year [6]. Group 2: Growth Strategy - The company has been diversifying its operations by acquiring assets to support third-party customers, with expectations that earnings from its parent will decline from 50% to 36% by the second half of next year [4]. - In 2022, Delek Logistics acquired 3Bear Energy for $624.7 million to enhance third-party revenue and growth [7]. - Recent acquisitions include the Wink to Webster Pipeline System and H2O Midstream for $230 million, aimed at expanding midstream services in the Permian Basin [8][9]. Group 3: Future Outlook - The company plans to invest in organic expansion projects, including a new natural gas processing plant in the Delaware Basin [9]. - Continued growth-focused investments are expected to generate incremental cash flow, allowing for further increases in distribution payments [10][11].

Delek Logistics Partners, L.P. (DKL) has been beaten down lately with too much selling pressure. While the stock has lost 6.8% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier. Guide to Identifying Oversold Stocks We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a moment ...

Delek Logistics Partners, L.P. (DKL) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is t ...