Shares of Delek Logistics DKL have begun to rebound this morning after Bank of America Merril Lynch BAC released a not at 10:52 AM EDT in which the bank raised it's price target from $39 to $40 while reiterating a Buy rating.
Along with increasing the price target BoA/ML also is increasing it's EPS guidance:
- FY2014 from $2.43 to $2.82
- FY2015 from $2.32 to $2.43
- FY2016 from $2.29 to $2.39
The Q2 2014 Delek reported in early August 2014 is being attributed to stronger than exepected performance of Pipeline and Transportation segment, as well stronger than expected margin performance from Delek West Texas wholesale business. The estimated from BoA/ML are conservative as the bank note highlights:
"We do not incorporate unannounced third-party acquisitions or a potential recontracting of the Paline pipeline into our model, but recognize there could be upside to our estimates if DKL can consummate deals at accretive terms or recontract Paline at favorable rates".
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