Mizuho Increases Delek Logistics Price Target to $52 Amid Growth Prospects

Mizuho's New Price Target#

Mizuho has increased its price target for Delek Logistics Partners, LP (NYSE:DKL) shares from $45.00 to $52.00 while keeping a Neutral rating. Currently, the stock is trading at $50.07, reflecting a 52% increase over the past year and nearing the new target.

Growth Outlook#

The firm anticipates attractive medium-term growth for Delek Logistics, driven by stronger commodity pricing and the execution of growth plans. In the Delaware Basin, Mizuho expects a significant increase in processing capacity and is optimistic about the potential for a future third processing unit.

Long-Term Drivers#

Mizuho identifies produced water handling as a key growth area for Delek Logistics. This positions the company to benefit from disposal dynamics as a comprehensive water service provider in the Permian Basin. Although Delek has indicated potential for increased earnings tied to capital expenditures by 2026, Mizuho adopts a cautious approach due to historically variable volume trends.

Financial Considerations#

Commodity prices are somewhat favorable for Delek Logistics, given that it primarily operates under fee-based contracts. Mizuho sees opportunities for increased activity from producers in the medium term. However, the partnership also manages a high debt-to-equity ratio of 389, indicating significant debt levels. Despite this, Delek Logistics offers an attractive 9% dividend yield for income-focused investors. Mizuho believes there is potential for valuation growth, but also notes that certain factors may limit this expansion.

Analyst Perspectives#

In recent news, Delek Logistics reported its fourth-quarter 2025 earnings, which fell short of analysts' expectations. The company reported earnings per share (EPS) of $0.88, below the projected $1.14, and revenue of $255.7 million, missing the anticipated $284 million. Despite these results, analysts remain interested in the company, with Raymond James raising its price target to $55.00 and Truist Securities initiating coverage with a Hold rating and a target of $57.00.