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NEW YORK (TheStreet) -- Delek Logistics (DKL) - Get Report has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DELEK LOGISTICS PARTNERS LP (DKL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- DELEK LOGISTICS PARTNERS LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DELEK LOGISTICS PARTNERS LP increased its bottom line by earning $2.89 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($3.41 versus $2.89).
- DKL, with its decline in revenue, slightly underperformed the industry average of 19.3%. Since the same quarter one year prior, revenues fell by 22.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for DELEK LOGISTICS PARTNERS LP is rather low; currently it is at 16.90%. Regardless of DKL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DKL's net profit margin of 11.81% compares favorably to the industry average.
- The debt-to-equity ratio is very high at 12.55 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, DKL maintains a poor quick ratio of 0.97, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: DKL Ratings Report