Shares of Delek US (DK) surged by 8.6% today, driven by rising oil prices and a price target increase from Bank of America, which raised its target from $28 to $40. Despite this upward adjustment, the analyst maintains an underweight rating, highlighting that the new target remains below the current stock price. Delek US has seen a remarkable 55% increase in 2026, largely due to a significant rise in the refining crack spread, exacerbated by recent geopolitical tensions in the Persian Gulf that have disrupted global supply chains.
The ongoing conflict has heightened supply issues for international refiners, while U.S. companies like Delek, which utilize domestic crude from the Permian Basin, are better positioned to capitalize on these conditions. However, analysts caution that a resolution to the conflict could lead to a decline in crack spreads, and sustained high oil prices may dampen demand for transportation fuels.
For market professionals, Delek US exemplifies how U.S. refiners can serve as a hedge against geopolitical risks, making them an attractive option in the current volatile environment.
Source: fool.com