Intrinsic value of Delek US Holdings - DK

Previous Close

$38.55

  Intrinsic Value

$916.58

stock screener

  Rating & Target

str. buy

+999%

Previous close

$38.55

 
Intrinsic value

$916.58

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of DK stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  11,627
  17,964
  26,866
  38,981
  54,996
  75,607
  101,486
  133,258
  171,471
  216,582
  268,945
  328,811
  396,328
  471,552
  554,462
  644,972
  742,954
  848,248
  960,685
  1,080,095
  1,206,323
  1,339,236
  1,478,734
  1,624,754
  1,777,272
  1,936,310
  2,101,934
  2,274,256
  2,453,431
  2,639,660
Variable operating expenses, $m
  10,677
  16,446
  24,549
  35,579
  50,159
  68,922
  92,482
  121,406
  156,194
  197,261
  244,840
  299,340
  360,806
  429,288
  504,766
  587,164
  676,364
  772,221
  874,581
  983,288
  1,098,203
  1,219,203
  1,346,198
  1,479,130
  1,617,978
  1,762,762
  1,913,542
  2,070,418
  2,233,534
  2,403,072
Fixed operating expenses, $m
  387
  396
  405
  413
  423
  432
  441
  451
  461
  471
  482
  492
  503
  514
  525
  537
  549
  561
  573
  586
  599
  612
  625
  639
  653
  667
  682
  697
  712
  728
Total operating expenses, $m
  11,064
  16,842
  24,954
  35,992
  50,582
  69,354
  92,923
  121,857
  156,655
  197,732
  245,322
  299,832
  361,309
  429,802
  505,291
  587,701
  676,913
  772,782
  875,154
  983,874
  1,098,802
  1,219,815
  1,346,823
  1,479,769
  1,618,631
  1,763,429
  1,914,224
  2,071,115
  2,234,246
  2,403,800
Operating income, $m
  563
  1,122
  1,912
  2,989
  4,415
  6,253
  8,563
  11,401
  14,816
  18,849
  23,624
  28,979
  35,019
  41,750
  49,170
  57,271
  66,041
  75,466
  85,531
  96,221
  107,522
  119,422
  131,911
  144,985
  158,641
  172,881
  187,710
  203,140
  219,184
  235,860
EBITDA, $m
  872
  1,550
  2,505
  3,809
  5,534
  7,757
  10,551
  13,983
  18,112
  22,988
  28,649
  35,123
  42,425
  50,562
  59,531
  69,323
  79,924
  91,317
  103,483
  116,404
  130,063
  144,447
  159,543
  175,345
  191,851
  209,063
  226,987
  245,637
  265,029
  285,185
Interest expense (income), $m
  0
  120
  331
  638
  1,068
  1,654
  2,429
  3,426
  4,678
  6,214
  8,063
  10,245
  12,778
  15,673
  18,939
  22,577
  26,588
  30,966
  35,705
  40,798
  46,236
  52,012
  58,118
  64,547
  71,294
  78,357
  85,734
  93,427
  101,438
  109,773
  118,440
Earnings before tax, $m
  443
  791
  1,274
  1,920
  2,761
  3,824
  5,137
  6,723
  8,601
  10,786
  13,379
  16,201
  19,346
  22,811
  26,593
  30,683
  35,075
  39,761
  44,733
  49,985
  55,510
  61,304
  67,364
  73,691
  80,284
  87,146
  94,284
  101,702
  109,411
  117,420
Tax expense, $m
  120
  214
  344
  518
  745
  1,032
  1,387
  1,815
  2,322
  2,912
  3,612
  4,374
  5,223
  6,159
  7,180
  8,284
  9,470
  10,736
  12,078
  13,496
  14,988
  16,552
  18,188
  19,896
  21,677
  23,530
  25,457
  27,460
  29,541
  31,703
Net income, $m
  323
  578
  930
  1,402
  2,015
  2,791
  3,750
  4,908
  6,279
  7,874
  9,767
  11,827
  14,123
  16,652
  19,413
  22,399
  25,605
  29,026
  32,655
  36,489
  40,522
  44,752
  49,176
  53,794
  58,607
  63,617
  68,827
  74,243
  79,870
  85,717

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,499
  14,677
  21,949
  31,847
  44,931
  61,770
  82,914
  108,871
  140,091
  176,946
  219,726
  268,637
  323,797
  385,255
  452,991
  526,938
  606,988
  693,013
  784,874
  882,431
  985,558
  1,094,147
  1,208,116
  1,327,413
  1,452,020
  1,581,953
  1,717,266
  1,858,052
  2,004,437
  2,156,585
Adjusted assets (=assets-cash), $m
  9,499
  14,677
  21,949
  31,847
  44,931
  61,770
  82,914
  108,871
  140,091
  176,946
  219,726
  268,637
  323,797
  385,255
  452,991
  526,938
  606,988
  693,013
  784,874
  882,431
  985,558
  1,094,147
  1,208,116
  1,327,413
  1,452,020
  1,581,953
  1,717,266
  1,858,052
  2,004,437
  2,156,585
Revenue / Adjusted assets
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
  1.224
Average production assets, $m
  2,977
  4,599
  6,878
  9,979
  14,079
  19,355
  25,981
  34,114
  43,897
  55,445
  68,850
  84,176
  101,460
  120,717
  141,942
  165,113
  190,196
  217,152
  245,935
  276,504
  308,819
  342,845
  378,556
  415,937
  454,982
  495,695
  538,095
  582,209
  628,078
  675,753
Working capital, $m
  -640
  -988
  -1,478
  -2,144
  -3,025
  -4,158
  -5,582
  -7,329
  -9,431
  -11,912
  -14,792
  -18,085
  -21,798
  -25,935
  -30,495
  -35,473
  -40,862
  -46,654
  -52,838
  -59,405
  -66,348
  -73,658
  -81,330
  -89,361
  -97,750
  -106,497
  -115,606
  -125,084
  -134,939
  -145,181
Total debt, $m
  4,040
  7,778
  13,028
  20,174
  29,621
  41,779
  57,045
  75,786
  98,326
  124,936
  155,823
  191,137
  230,963
  275,335
  324,241
  377,630
  435,426
  497,537
  563,860
  634,296
  708,754
  787,155
  869,441
  955,573
  1,045,539
  1,139,351
  1,237,047
  1,338,695
  1,444,384
  1,554,235
Total liabilities, $m
  6,859
  10,597
  15,847
  22,993
  32,440
  44,598
  59,864
  78,605
  101,145
  127,755
  158,642
  193,956
  233,782
  278,154
  327,060
  380,449
  438,245
  500,356
  566,679
  637,115
  711,573
  789,974
  872,260
  958,392
  1,048,358
  1,142,170
  1,239,866
  1,341,514
  1,447,203
  1,557,054
Total equity, $m
  2,641
  4,080
  6,102
  8,853
  12,491
  17,172
  23,050
  30,266
  38,945
  49,191
  61,084
  74,681
  90,016
  107,101
  125,932
  146,489
  168,743
  192,658
  218,195
  245,316
  273,985
  304,173
  335,856
  369,021
  403,661
  439,783
  477,400
  516,538
  557,233
  599,531
Total liabilities and equity, $m
  9,500
  14,677
  21,949
  31,846
  44,931
  61,770
  82,914
  108,871
  140,090
  176,946
  219,726
  268,637
  323,798
  385,255
  452,992
  526,938
  606,988
  693,014
  784,874
  882,431
  985,558
  1,094,147
  1,208,116
  1,327,413
  1,452,019
  1,581,953
  1,717,266
  1,858,052
  2,004,436
  2,156,585
Debt-to-equity ratio
  1.530
  1.910
  2.140
  2.280
  2.370
  2.430
  2.470
  2.500
  2.520
  2.540
  2.550
  2.560
  2.570
  2.570
  2.570
  2.580
  2.580
  2.580
  2.580
  2.590
  2.590
  2.590
  2.590
  2.590
  2.590
  2.590
  2.590
  2.590
  2.590
  2.590
Adjusted equity ratio
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  323
  578
  930
  1,402
  2,015
  2,791
  3,750
  4,908
  6,279
  7,874
  9,767
  11,827
  14,123
  16,652
  19,413
  22,399
  25,605
  29,026
  32,655
  36,489
  40,522
  44,752
  49,176
  53,794
  58,607
  63,617
  68,827
  74,243
  79,870
  85,717
Depreciation, amort., depletion, $m
  309
  427
  594
  820
  1,119
  1,505
  1,988
  2,582
  3,296
  4,139
  5,026
  6,144
  7,406
  8,811
  10,361
  12,052
  13,883
  15,850
  17,951
  20,183
  22,542
  25,025
  27,632
  30,360
  33,210
  36,182
  39,277
  42,497
  45,845
  49,325
Funds from operations, $m
  632
  1,005
  1,524
  2,222
  3,135
  4,296
  5,738
  7,490
  9,575
  12,013
  14,792
  17,971
  21,528
  25,464
  29,773
  34,451
  39,488
  44,876
  50,607
  56,672
  63,064
  69,777
  76,808
  84,154
  91,817
  99,799
  108,104
  116,740
  125,715
  135,042
Change in working capital, $m
  -240
  -349
  -490
  -666
  -881
  -1,134
  -1,423
  -1,747
  -2,102
  -2,481
  -2,880
  -3,293
  -3,713
  -4,137
  -4,560
  -4,978
  -5,389
  -5,791
  -6,184
  -6,568
  -6,943
  -7,310
  -7,672
  -8,031
  -8,388
  -8,747
  -9,109
  -9,478
  -9,855
  -10,243
Cash from operations, $m
  872
  1,354
  2,013
  2,888
  4,015
  5,430
  7,162
  9,237
  11,677
  14,494
  17,672
  21,264
  25,242
  29,601
  34,333
  39,429
  44,877
  50,667
  56,791
  63,239
  70,006
  77,087
  84,480
  92,186
  100,206
  108,546
  117,213
  126,217
  135,570
  145,284
Maintenance CAPEX, $m
  -136
  -217
  -336
  -502
  -728
  -1,028
  -1,413
  -1,896
  -2,490
  -3,204
  -4,047
  -5,026
  -6,144
  -7,406
  -8,811
  -10,361
  -12,052
  -13,883
  -15,850
  -17,951
  -20,183
  -22,542
  -25,025
  -27,632
  -30,360
  -33,210
  -36,182
  -39,277
  -42,497
  -45,845
New CAPEX, $m
  -1,115
  -1,622
  -2,279
  -3,101
  -4,100
  -5,276
  -6,625
  -8,134
  -9,782
  -11,548
  -13,405
  -15,326
  -17,284
  -19,257
  -21,225
  -23,171
  -25,083
  -26,955
  -28,784
  -30,569
  -32,314
  -34,026
  -35,712
  -37,381
  -39,045
  -40,714
  -42,400
  -44,114
  -45,869
  -47,675
Cash from investing activities, $m
  -1,251
  -1,839
  -2,615
  -3,603
  -4,828
  -6,304
  -8,038
  -10,030
  -12,272
  -14,752
  -17,452
  -20,352
  -23,428
  -26,663
  -30,036
  -33,532
  -37,135
  -40,838
  -44,634
  -48,520
  -52,497
  -56,568
  -60,737
  -65,013
  -69,405
  -73,924
  -78,582
  -83,391
  -88,366
  -93,520
Free cash flow, $m
  -379
  -486
  -601
  -715
  -813
  -874
  -876
  -793
  -596
  -259
  220
  912
  1,813
  2,938
  4,297
  5,897
  7,741
  9,829
  12,157
  14,719
  17,509
  20,520
  23,744
  27,173
  30,801
  34,622
  38,631
  42,826
  47,204
  51,765
Issuance/(repayment) of debt, $m
  2,574
  3,738
  5,251
  7,146
  9,447
  12,158
  15,266
  18,741
  22,540
  26,609
  30,888
  35,313
  39,826
  44,372
  48,906
  53,389
  57,796
  62,110
  66,323
  70,436
  74,458
  78,401
  82,286
  86,132
  89,966
  93,812
  97,697
  101,647
  105,690
  109,851
Issuance/(repurchase) of shares, $m
  667
  862
  1,092
  1,350
  1,622
  1,890
  2,128
  2,308
  2,400
  2,372
  2,127
  1,770
  1,212
  433
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  3,241
  4,600
  6,343
  8,496
  11,069
  14,048
  17,394
  21,049
  24,940
  28,981
  33,015
  37,083
  41,038
  44,805
  48,906
  53,389
  57,796
  62,110
  66,323
  70,436
  74,458
  78,401
  82,286
  86,132
  89,966
  93,812
  97,697
  101,647
  105,690
  109,851
Total cash flow (excl. dividends), $m
  2,862
  4,114
  5,741
  7,781
  10,256
  13,173
  16,517
  20,257
  24,345
  28,723
  33,234
  37,996
  42,852
  47,743
  53,203
  59,287
  65,538
  71,939
  78,480
  85,155
  91,967
  98,921
  106,029
  113,305
  120,767
  128,434
  136,328
  144,473
  152,894
  161,616
Retained Cash Flow (-), $m
  -990
  -1,439
  -2,022
  -2,752
  -3,637
  -4,681
  -5,878
  -7,216
  -8,679
  -10,246
  -11,893
  -13,597
  -15,335
  -17,085
  -18,831
  -20,557
  -22,254
  -23,915
  -25,537
  -27,121
  -28,669
  -30,188
  -31,683
  -33,165
  -34,641
  -36,121
  -37,617
  -39,138
  -40,695
  -42,297
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  1,872
  2,674
  3,720
  5,029
  6,619
  8,492
  10,639
  13,040
  15,666
  18,477
  21,341
  24,399
  27,517
  30,658
  34,372
  38,730
  43,284
  48,024
  52,943
  58,034
  63,297
  68,733
  74,346
  80,141
  86,126
  92,312
  98,711
  105,335
  112,199
  119,318
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1,794
  2,448
  3,237
  4,141
  5,130
  6,163
  7,188
  8,151
  8,999
  9,687
  10,135
  10,412
  10,462
  10,292
  10,091
  9,842
  9,418
  8,844
  8,152
  7,374
  6,547
  5,703
  4,873
  4,082
  3,350
  2,693
  2,119
  1,630
  1,225
  898
Current shareholders' claim on cash, %
  82.9
  71.1
  62.5
  56.2
  51.4
  47.7
  44.9
  42.7
  41.0
  39.8
  38.9
  38.4
  38.1
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0
  38.0

Delek US Holdings, Inc. operates as an integrated energy company that operates in petroleum refining, wholesale distribution, and convenience store retailing businesses. The company operates in three segments: Refining, Logistics, and Retail. The Refining segment owns and operates two refineries in Tyler, Texas, and El Dorado, Arkansas; and produces various petroleum-based products used in transportation and industrial markets. This segment offers a range of products, such as gasoline, diesel, jet fuels, liquefied petroleum gas, and natural gas liquids, as well as biodiesel blended products. The Logistics segment gathers, transports, and stores crude oil and intermediate products, as well as markets, distributes, transports, and stores refined products. It also offers crude oil and refined product transportation services; terminalling; and wholesale marketing services to third parties in Texas, Tennessee, and Arkansas, as well as markets light products using third-party terminals. This segment owns approximately 400 miles of crude oil transportation pipelines, 245 miles of active refined product pipelines, 600-mile crude oil gathering system, and associated crude oil storage tanks with an aggregate of approximately 8.5 million barrels of active shell capacity. The Retail segment markets gasoline, diesel, and other refined petroleum products, as well as convenience merchandise. As of December 31, 2015, this segment operated a network of approximately 358 company-operated convenience store locations under the MAPCO Express, MAPCO Mart, Discount Food Mart, Fast Food and Fuel, East Coast, Delta Express, and Favorite Markets brands. The company serves oil companies, independent refiners and marketers, jobbers, distributors, utility and transportation companies, independent retail fuel operators, and the United States government. Delek US Holdings, Inc. was founded in 2001 and is headquartered in Brentwood, Tennessee.

FINANCIAL RATIOS  of  Delek US Holdings (DK)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

DK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DK stock intrinsic value calculation we used $7267.1 million for the last fiscal year's total revenue generated by Delek US Holdings. The default revenue input number comes from 0001 income statement of Delek US Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DK stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for DK is calculated based on our internal credit rating of Delek US Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Delek US Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DK stock the variable cost ratio is equal to 92.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $379 million in the base year in the intrinsic value calculation for DK stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 8.2% for Delek US Holdings.

Corporate tax rate of 27% is the nominal tax rate for Delek US Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DK stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DK are equal to 25.6%.

Life of production assets of 13.7 years is the average useful life of capital assets used in Delek US Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DK is equal to -5.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1650.6 million for Delek US Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 83.946 million for Delek US Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Delek US Holdings at the current share price and the inputted number of shares is $3.2 billion.

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COMPANY NEWS

▶ Delek US Holdings: 3Q Earnings Snapshot   [05:07AM  Associated Press]
▶ Delek US Holdings Reports Third Quarter 2018 Results   [Nov-06-18 08:00PM  GlobeNewswire]
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▶ Permian Pipeline to Temporarily Convert to Oil   [Oct-05-18 11:44AM  Bloomberg]
▶ India Cutting Iran Imports Is Good News for Crude Oil   [Aug-14-18 01:02PM  TheStreet.com]
▶ Delek US Holdings: 2Q Earnings Snapshot   [07:01PM  Associated Press]
▶ ExxonMobil (XOM) Plans to Further Expand Singapore Facility   [Jun-27-18 04:20PM  InvestorPlace]
▶ Top Ranked Growth Stocks to Buy for May 9th   [May-09-18 10:20AM  Zacks]
▶ Delek US Holdings: 1Q Earnings Snapshot   [05:04AM  Associated Press]
▶ Delek US Holdings Reports First Quarter 2018 Results   [May-07-18 08:40PM  GlobeNewswire]
▶ Andeavor Reports First Quarter 2018 Results   [04:54PM  GlobeNewswire]
▶ Should You Buy Delek US Holdings Inc (NYSE:DK)?   [09:31AM  Simply Wall St.]
▶ The Markets 4 Best Stocks to Buy Right Now   [May-04-18 01:34PM  InvestorPlace]
▶ Solid Earnings Take Backseat to Rate/Tech Fears   [Apr-24-18 09:15AM  Zacks]
▶ Anatomy of Success: Delek US Holdings (DK)   [Apr-02-18 05:07PM  Zacks]

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