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Delek Stock Has Dropped 11% in the Past Month

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Jun. 5 2019, Published 11:34 a.m. ET

Delek’s returns

Delek US Holdings (DK) stock has fallen 11.1% since May 3, 2019. Delek is down more than Phillips 66 (PSX), which has fallen 7.7% in the past month. HollyFrontier (HFC) and PBF Energy (PBF) have seen falls of 16.3% and 21.1%, respectively, in the same period.

Delek stock has underperformed the SPDR S&P 500 ETF (SPY). SPY has fallen 5.7% in the past month.

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Delek’s ten-day moving average breaks below its 30-day moving average

In the past month, Delek’s ten-day moving average has fallen 9.7%, breaking below its 30-day moving average. Usually, if a short-term moving average breaks below a long-term moving average, it’s considered a technically bearish sign. Delek’s ten-day moving average, which stood 0.1% above its 30-day moving average on May 3, now stands 6.2% below its 30-day moving average.

Why Delek stock has fallen in the past month

Delek stock has been affected by lower equity markets and a narrowing oil spread. However, a higher crack and better-than-expected first-quarter earnings could have partly offset the fall.

The Midland spread (the difference between WTI Cushing oil and WTI Midland oil) has fallen 75% since May 3 to its current level of $0.9 per barrel. The spread is vital to Delek, as the company refines a large quantity of Permian crude in its system.

However, the effect of a lower spread could be partially offset by a higher crack. The benchmark industry crack, the US Gulf Coast WTI 3-2-1, is up. Currently, it stands at $20.4 per barrel. Delek’s first-quarter adjusted EPS of $1.5 surpassed Wall Street’s estimate of $0.5. A higher contribution margin from the Refining and Logistics segment supported Delek’s earnings in the quarter.

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