Delek US Holdings, Inc. (DK): A Bull Case Theory

We came across a bullish thesis on Delek US Holdings, Inc. on Value investing subreddit by MarketingReasonable4. In this article, we will summarize the bulls’ thesis on DK. Delek US Holdings, Inc.'s share was trading at $32.72 as of September 24th. DK’s trailing and forward P/E were 4.61 and 20.33 respectively according to Yahoo Finance.

Delek (DK) presents a compelling investment opportunity driven by multiple underappreciated catalysts and a strong balance sheet. The company is an oil and gas refiner with four diesel-focused refineries, benefiting from midstream and refining tailwinds including low inventories, rising diesel cracks, and Permian-sourced crude that bolster margins. DK recently received EPA approvals for Renewable Identification Number (RIN) SRE refunds, unlocking $600–$900 million in cash—representing roughly 35–50% of its $1.7 billion market cap—even with conservative haircuts, and these funds could be deployed toward a $565 million share repurchase program, effectively retiring much of the constrained 60 million share float.

The company also owns a majority stake in DKL, which generates over 80% of EBITDA from third-party operations, trades at depressed multiples, and could be spun or sold to unlock substantial net asset value. Combined with a 6.3% dividend, high institutional and insider ownership, and ongoing insider purchases, DK’s capital structure and shareholder alignment are strong. Despite a 144% rally over recent months, the market has yet to fully price in cash, RIN refunds, buybacks, DKL value, and favorable diesel macro conditions.

Analysts at Wolfe Research and Bloomberg Intelligence project significant upside from SRE relief alone, with partial approvals potentially adding 20% and full approvals capable of doubling the stock. With multiple near-term catalysts, including retroactive RIN refunds, accelerating buybacks, and potential DKL revaluation, DK offers a high-conviction risk/reward profile, trading below its sum-of-the-parts value and poised for meaningful rerating in the months ahead.

Previously we covered a bullish thesis on Delek US Holdings, Inc. (DK) by Matt Lindsay in May 2025, which highlighted the company’s undervaluation, DKL stake, cost reductions, and steps toward unlocking SOTP value. The company's stock price has appreciated approximately by 83% since our coverage. The thesis still stands as DK continues to execute. MarketingReasonable4 shares a similar view but emphasizes EPA-approved RIN refunds, accelerating buybacks, and diesel tailwinds as near-term catalysts.

Delek US Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held DK at the end of the second quarter which was 21 in the previous quarter. While we acknowledge the potential of DK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.