Analysts Just Made A Major Revision To Their Delek US Holdings, Inc. (NYSE:DK) Revenue Forecasts

The latest analyst coverage could presage a bad day for Delek US Holdings, Inc. (NYSE:DK), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from eight analysts covering Delek US Holdings is for revenues of US$11b in 2023, implying a painful 47% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$14b of revenue in 2023. The consensus view seems to have become more pessimistic on Delek US Holdings, noting the pretty serious reduction to revenue estimates in this update.

Check out our latest analysis for Delek US Holdings

There was no particular change to the consensus price target of US$31.85, with Delek US Holdings' latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Delek US Holdings analyst has a price target of US$53.00 per share, while the most pessimistic values it at US$24.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 47% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 14% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 6.3% per year. The forecasts do look bearish for Delek US Holdings, since they're expecting it to shrink faster than the industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Delek US Holdings this year. Analysts also expect revenues to shrink faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Delek US Holdings after today.

Still got questions? We have estimates for Delek US Holdings from its eight analysts out until 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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