![Aerial view of petroleum terminal](https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1152513641/image_1152513641.jpg?io=getty-c-w750)
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Delek Logistics Companions (NYSE:DKL) +2.4% in Tuesday’s buying and selling as Raymond James upgrades items to Outperform from Market Carry out with a $45 worth goal, as valuation seems to be extra engaging with items buying and selling close to the underside of a greater than three-year vary.
Ray Jay analysts Justin Jenkins and J.R. Weston say Delek Logistics (DKL) has been one of many worst performing equities in its protection these days, down almost 10% YTD, however a gentle development outlook and improved stability sheet opens a extra compelling danger/reward alternative.
Delek Logistics (DKL) now trades beneath 8x EV/EBITDA on 2025 estimates – close to the underside of the midstream group – and boasts a free money move yield within the mid-teens on subsequent yr’s outlook, Ray Jay writes, including the overall return alternative seems to be even higher with an almost 11% distribution yield.
With the current bond providing extending maturities coupled with this month’s fairness increase, Ray Jay says Delek Logistics’ (DKL) financing profile seems to be a lot improved, including the fairness providing will increase freefloat by greater than 35%, serving to with liquidity and taking leverage from the low-4s to upper-3s, close to the midstream common.
On the similar time, Ray Jay downgrades Western Midstream Companions (WES) to Market Carry out from Outperform on valuation, after rating as one of many group’s greatest performers YTD.
Western Midstream (WES) shares have been rewarded for the next than anticipated distribution outlook – not less than $3.20/share annualized for 2024, or a 9%-plus yield primarily based on the newest shut – however Ray Jay stays skeptical of its sustainability.
Extra on Delek Logistics Companions
![Aerial view of petroleum terminal](https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1152513641/image_1152513641.jpg?io=getty-c-w750)
thexfilephoto/iStock by way of Getty Photographs
Delek Logistics Companions (NYSE:DKL) +2.4% in Tuesday’s buying and selling as Raymond James upgrades items to Outperform from Market Carry out with a $45 worth goal, as valuation seems to be extra engaging with items buying and selling close to the underside of a greater than three-year vary.
Ray Jay analysts Justin Jenkins and J.R. Weston say Delek Logistics (DKL) has been one of many worst performing equities in its protection these days, down almost 10% YTD, however a gentle development outlook and improved stability sheet opens a extra compelling danger/reward alternative.
Delek Logistics (DKL) now trades beneath 8x EV/EBITDA on 2025 estimates – close to the underside of the midstream group – and boasts a free money move yield within the mid-teens on subsequent yr’s outlook, Ray Jay writes, including the overall return alternative seems to be even higher with an almost 11% distribution yield.
With the current bond providing extending maturities coupled with this month’s fairness increase, Ray Jay says Delek Logistics’ (DKL) financing profile seems to be a lot improved, including the fairness providing will increase freefloat by greater than 35%, serving to with liquidity and taking leverage from the low-4s to upper-3s, close to the midstream common.
On the similar time, Ray Jay downgrades Western Midstream Companions (WES) to Market Carry out from Outperform on valuation, after rating as one of many group’s greatest performers YTD.
Western Midstream (WES) shares have been rewarded for the next than anticipated distribution outlook – not less than $3.20/share annualized for 2024, or a 9%-plus yield primarily based on the newest shut – however Ray Jay stays skeptical of its sustainability.