DELEK US HOLDINGS INC. (DK): Oil Refiner Surges +17% Despite Negative Earnings

Stock: Delek US Holdings, Inc. (NYSE: DK)
Performance: +17% in February 2026
Current Price: $35.06
Sector: Energy – Oil Refining
Market Cap: $2.11 billion

CATALYST: Q3 2025 EARNINGS BEAT

Q3 2025 Results (Most Recent):
EPS: $7.13 vs. $0.28 estimate (MASSIVE +$6.85 beat, 2,446% surprise)
Revenue: $2.89B vs. $2.76B estimate (4.7% beat)
Prior Year: -$1.45 EPS (loss)

(Source: Delek US Holdings Average Rating, Defense World, February 10, 2026, URL: https://www.defenseworld.net/2026/02/10/delek-us-holdings-inc-nysedk-given-average-rating-of-hold-by-brokerages.html)

THE PROBLEM: FULL-YEAR STILL DEEPLY NEGATIVE

Despite the Q3 beat, consensus for current year is -$5.50 EPS (deeply negative). Zacks downgraded estimates:

• FY2025 EPS: -$1.69 (from -$1.61)
• FY2026 EPS: -$2.08 (from -$2.21)
• Q4 2025 EPS: -$0.33 (from -$0.25)
• Q1 2026 EPS: -$0.89 (from -$0.81)

(Source: FY2025 EPS Estimates Reduced, Markets Daily, February 13, 2026, URL: https://www.themarketsdaily.com/2026/02/13/fy2025-eps-estimates-for-delek-us-reduced-by-zacks-research.html)

POSITIVE DEVELOPMENTS:

1. EPA Small Refinery Exemption Relief

• Cash flow benefit from regulatory relief
• Helps offset compliance costs

1. Enterprise Optimization Plan

• Expected cash flow enhancements
• Amended Inventory Intermediation Agreement
• Big Spring refinery turnaround planned

1. Analyst Improvements (Mixed)

• Some FY2026/2027 estimates improved:
• Q4 2027 EPS: $0.11 (from $0.03)
• Q2 2026 EPS: $0.23 (from $0.15)
• FY2026 loss narrowed to -$2.08 (from -$2.21)

(Source: FY2025 Estimate Cuts, Markets Daily, February 13, 2026, URL: https://www.themarketsdaily.com/2026/02/13/fy2025-eps-estimates-for-delek-us-reduced-by-zacks-research.html)

ANALYST RATINGS (CAUTIOUS):

Consensus: HOLD (out of 14 analysts)

• 2 Sell ratings
• 8 Hold ratings
• 4 Buy ratings
  Average Price Target: $38.85 (+11% upside)

Recent Downgrades:

• Piper Sandler: $47 → $40 (Neutral)
• Morgan Stanley: $40 → $38
• Citi: $37 → $33
• Scotiabank: $40 → $34

(Source: Analyst Ratings, Defense World, February 10, 2026, URL: https://www.defenseworld.net/2026/02/10/delek-us-holdings-inc-nysedk-given-average-rating-of-hold-by-brokerages.html)

BUSINESS OVERVIEW:

Refining Segment:

• 4 refineries: Tyler TX, El Dorado AR, Big Spring TX, Krotz Springs LA
• Processes crude oil into gasoline, diesel, aviation fuel, asphalt
• Struggling with margin compression

Logistics Segment:

• Crude oil pipelines, storage, transportation
• Refined product distribution
• More stable than refining

FINANCIAL METRICS:

52-Week Range: $11.02 – $43.50
P/E Ratio: -4.30 (negative due to losses)
Beta: 0.84 (slightly less volatile than market)
Debt-to-Equity: 7.12 (VERY HIGH leverage)
Current Ratio: 0.86 (liquidity concerns)
Dividend Yield: 3.43%

BULL CASE:
✓ Q3 2025 beat expectations massively (+$6.85 EPS surprise)
✓ EPA relief provides cash flow benefit
✓ Optimization plan underway
✓ Stock up +218% from $11.02 52-week low
✓ Dividend yield of 3.43% provides income
✓ Simply Wall St fair value estimate: $41.50 (+18% upside)

BEAR CASE:
✗ Full-year FY2025 consensus: -$5.50 EPS (massive loss)
✗ FY2026 expected: -$2.08 EPS (still losing money)
✗ Debt-to-Equity of 7.12 is dangerously high
✗ Negative return on equity: -56.40%
✗ Net margin: -4.83% (losing money on sales)
✗ Analyst downgrades from major firms
✗ Refining margins under pressure
✗ Structural headwinds (EV adoption, fossil fuel demand decline)

RISK FACTORS:

1. Leverage Risk: 7.12x debt-to-equity makes company vulnerable to downturns
2. Profitability: Company is structurally unprofitable at current refining margins
3. Energy Transition: Long-term demand risk for gasoline/diesel
4. Execution: Optimization plan must deliver to avoid bankruptcy risk
5. Macro: Oil price volatility impacts margins

UPCOMING CATALYST:
Q4 2025 Earnings: Expected February 24, 2026
EPS Estimate: $0.06
(Source: Buy Delek Stock, Public.com, URL: https://public.com/stocks/dk)

KEY TAKEAWAYS:
✓ DK surged +17% in Feb but this appears to be a short squeeze/oversold bounce
✗ Company is deeply unprofitable (-$5.50 EPS consensus for FY2025)
✗ High leverage (7.12x debt/equity) creates bankruptcy risk if losses continue
✓ EPA relief and optimization plan are positives but insufficient to turn profitable
✗ Analysts downgrading with Hold consensus
⚠ This is a HIGH-RISK turnaround play, not a momentum growth story

TRADING STRATEGY:

• For Speculators: Short-term trade only; exit on any signs of margin compression
• For Value Investors: Wait for actual profitability before investing
• For Income Investors: 3.43% yield not worth the risk given losses
• Position Size: <2% max (high bankruptcy risk)
• Stop Loss: $30 (support from prior consolidation)

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SOURCES:

1. Q3 2025 Earnings & Analyst Ratings
   Publication: Defense World
   Date: February 10, 2026
   URL: https://www.defenseworld.net/2026/02/10/delek-us-holdings-inc-nysedk-given-average-rating-of-hold-by-brokerages.html
2. FY2025/2026 Estimate Downgrades
   Publication: Markets Daily
   Date: February 13, 2026
   URL: https://www.themarketsdaily.com/2026/02/13/fy2025-eps-estimates-for-delek-us-reduced-by-zacks-research.html
3. Company Overview & Stock Data
   Publication: Yahoo Finance
   URL: https://finance.yahoo.com/quote/DK/
4. Analyst Coverage
   Publication: CNBC
   URL: https://www.cnbc.com/quotes/DK
5. Earnings Calendar
   Publication: Nasdaq
   URL: https://www.nasdaq.com/market-activity/stocks/dk/earnings
6. Company Investor Relations
   Publication: Delek US Holdings
   URL: https://ir.delekus.com

YOUTUBE VIDEOS:

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• “Delek US DK stock earnings analysis”
• “DK refining margins 2026”
• “oil refining stocks analysis”

Recommended Channels:

• Bloomberg Commodities
• CNBC Energy
• Oil & Energy Investor

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