Yahoo Finance Analyst Estimates: Here's What Brokers Think Of Delek US Holdings, Inc. (NYSE:DK) After Its First-Quarter Report
Delek US Holdings, Inc. (NYSE:DK) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to US$19.68 in the week after its latest quarterly results. Results overall weren't great; even though revenues of US$1.8b beat expectations by 11%, statutory losses ballooned to US$4.28 per share, substantially worse than the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Delek US Holdings
Following the recent earnings report, the consensus from seven analysts covering Delek US Holdings is for revenues of US$6.17b in 2020, implying a disturbing 31% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$5.51 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$5.70b and losses of US$1.56 per share in 2020. While this year's revenue estimates increased, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
There was no major change to the consensus price target of US$21.82, with growing revenues seemingly enough to offset the concern of growing losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Delek US Holdings analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$11.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 31%, a significant reduction from annual growth of 16% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. It's pretty clear that Delek US Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Delek US Holdings. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Delek US Holdings analysts - going out to 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Delek US Holdings has 3 warning signs (and 1 which is concerning) we think you should know about.
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