Delek Logistics Partners (DKL): How 50 Quarters of Distribution Growth Shapes Its Current Valuation

Delek Logistics Partners (NYSE:DKL) just marked a milestone by extending its distribution growth streak to an impressive 50 consecutive quarters. That kind of consistency is a big deal for investors who count on reliable income, and it points to some solid fundamentals underneath the surface. The company is also expanding its midstream business, a move management says will support ongoing increases for years to come. With so much focus on stability and growth, it is easy to see why the latest update could spark renewed interest among those following the stock. Looking at the bigger picture, Delek Logistics Partners has enjoyed steady momentum this year, outpacing broader market averages with a 17% return over the past year and an even more dramatic 155% gain over five years. The past month alone has brought a 6% uptick, reflecting a streak of enthusiasm that has not faded. Even as the company reported nearly 20% net income growth annually, it has not been immune to shifting market sentiment. However, the combination of distribution increases and expansion efforts helps keep long-term growth firmly in view. All this raises a timely question for investors: Is Delek Logistics Partners now undervalued given its track record and momentum, or is the market already pricing in strong future growth potential?

Most Popular Narrative: Fairly Valued

According to the most widely followed narrative, Delek Logistics Partners is currently trading right around its perceived fair value, with only a marginal difference between the consensus price target and today's share price.

The analysts have a consensus price target of $43.75 for Delek Logistics Partners based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement among analysts, with the most bullish reporting a price target of $47.0 and the most bearish reporting a price target of just $36.0.

Want to know the strategic moves putting this stock on analysts’ radar? At the heart of this narrative is how ambitious growth and bold margin assumptions combine for a strikingly balanced outlook. Curious which financial levers drive the almost spot-on price target? Keep reading to discover the overlooked factors shaping every dime of the calculation.

Result: Fair Value of $43.75 (ABOUT RIGHT)

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

However, rising debt levels and shifting energy demand could challenge the bullish outlook. This may put pressure on both future earnings growth and dividend stability.

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

Another View: Discounted Cash Flow Model

While analysts see Delek Logistics Partners as fairly valued based on earnings growth and market outlook, our SWS DCF model tells a very different story. This approach suggests the shares may be considerably undervalued. Does this alternative view challenge the mainstream market wisdom?

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 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 want to dig deeper or take your own angle on the outlook, you can shape a personalized story from the numbers in just a few 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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