Delek Logistics Partners LP Dossier - Source-backed chat

Delek Logistics Partners LP

DKLNYSE

SectorEnergy

IndustryOil & Gas Refining & Marketing

Beta (adjusted)0.64

Intrinsic Value $58.90median of 5 methods · middle span $49-$189based on filings through 30 Jun 2026

Market Price $54.47Price as of 1 Oct 2026

Near fair valueIntrinsic value is 8% above the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $3.1B

Enterprise Value $5.5B

Shares Outstanding 57.8M diluted

Moat Rating Narrow

Next Earnings Date5 Nov 2026

Last ex-dividend3 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Delek Logistics Partners, LP (DKL) presents a compelling high-yield profile backed by 13 years of consecutive quarterly distribution increases, the strongest track record in its peer group. The partnership is successfully executing its 'full suite' midstream strategy in the Permian and Delaware Basins, highlighted by the completion of the Libby II gas plant and the drilling of its first acid gas injection (AGI) well. However, its high leverage ratio (4.05x as of Q1 2026) and relatively thin distribution coverage (estimated around 1.21x-1.24x) present clear balance sheet risks. While the strategic shift toward generating over 80% of run-rate EBITDA from third-party customers supports long-term deconsolidation from Delek US Holdings, near-term capital expenditure requirements and flat organic growth justify a Hold recommendation until leverage moderates and coverage improves.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets6 analysts · as of 18 Aug 2026

Low · most bearish analyst$36.00

Mean target$52.83

High · most bullish analyst$61.00

Street targets sit below today's price; our intrinsic value sits above it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

Severe weather disruptions (similar to Winter Storm Fern) or operational delays at the Libby Complex limit volume growth, causing Adjusted EBITDA to miss the low end of guidance. High capital expenditures and flat cash flows compress the distribution coverage ratio below 1.15x, forcing management to freeze distribution growth. Leverage rises above 4.5x, raising refinancing costs and pressuring the unit price.

Base CaseCentral scenario

The partnership successfully achieves its full-year 2026 Adjusted EBITDA guidance of $520 million to $560 million, driven by robust volumes in the Permian Basin and incremental contributions from the Libby Gas Complex. Third-party business scales to represent approximately 80% of run-rate EBITDA, facilitating progress toward economic separation and eventual deconsolidation from Delek US Holdings. Distribution growth continues at a modest pace of half a penny per quarter, maintaining a thin but stable coverage ratio of ~1.21x, while leverage remains managed near the 4.0x level.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Industry-leading track record of 53 consecutive quarterly distribution increases, offering a highly competitive forward yield.
Strategic transition to a third-party model, with pro forma third-party EBITDA expected to exceed 80% in 2026, reducing concentration risk from Delek US Holdings.
Strong footprint in the high-growth Permian and Delaware Basins, supported by full-suite crude, gas, and water midstream capabilities.

Key Investment Risks

Elevated leverage profile with total debt of approximately $2.3 billion and a leverage ratio of 4.05x as of Q1 2026.
Thin distribution coverage ratio (estimated at 1.21x to 1.24x), leaving little margin for operational or weather-related disruptions.
High capital expenditure requirements to fund expansion projects, including sour gas treating and acid gas injection capabilities.

Thesis Invalidation Triggers

A reduction or freeze in the quarterly cash distribution, ending the consecutive growth streak.
Leverage ratio exceeding 4.5x on a sustained basis, leading to credit rating downgrades.
Failure to achieve the targeted 80% third-party EBITDA mix, indicating continued heavy reliance on Delek US Holdings.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.