A Look at Delek Logistics Partners (DKL) Valuation as Quarterly Distribution Rises for Q3 2025

Delek Logistics Partners (NYSE:DKL) just announced an increased quarterly cash distribution for the third quarter of 2025, setting the payout at $1.12 per common limited partner unit, or $4.48 annually. This move highlights the partnership’s continued focus on cash flow strength and rewarding unitholders.

See our latest analysis for Delek Logistics Partners.

Following this distribution hike, Delek Logistics Partners has captured renewed investor attention. Its share price is now at $45.13 and it has achieved a 27.93% total shareholder return over the past year. Strong results have supported momentum, reflecting both consistent payouts and longer-term value creation.

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With the stock now delivering steady gains and another payout increase, the question is whether these strengths signal an undervalued opportunity or if the current price already reflects all the anticipated growth ahead.

Most Popular Narrative: 3.2% Overvalued

With Delek Logistics Partners trading just above the narrative's fair value, the small premium means growth assumptions are playing a crucial role in justifying the current share price. This narrative focuses on future operational expansions and their impact on earnings as a key catalyst.

The full commissioning and expected ramp to capacity of the new Libby 2 gas plant in the Delaware Basin, along with associated investments (amine unit and AGI wells), positions Delek Logistics to capitalize on rising energy demand and stable domestic energy infrastructure needs, which could boost gathering and processing volumes, EBITDA, and revenue growth.

Read the complete narrative.

The real story behind this small valuation premium? The narrative is balancing expected gains from new assets and a profit margin increase that surpasses the industry. Want to know which projections drive this target? Find out what’s behind the numbers by reading the complete narrative for the full picture.

Result: Fair Value of $43.75 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, recent acquisitions and heavy capital outlays could backfire if fossil fuel demand falls or if financial leverage becomes difficult to manage.

Find out about the key risks to this Delek Logistics Partners narrative.

Another View: What About Discounted Cash Flow?

Our SWS DCF model suggests a radically different perspective. It estimates Delek Logistics Partners’ fair value at $154.63 per unit, which is far above the current price. This hints at substantial upside if cash flows play out as projected. Is the market missing something, or are analysts too optimistic?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Delek Logistics Partners for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 849 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Delek Logistics Partners Narrative

If you have a different perspective or want to dig into the details yourself, you can build your own view from the ground up in just minutes. Do it your way

A great starting point for your Delek Logistics Partners research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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