PBF Energy, Delek US Shares Surge on Favorable Analyst Outlook

Petroleum refiners PBF Energy (NYSE:PBF) and Delek US Holdings (NYSE:DK) have seen their stock prices rally significantly in July, continuing a period of strong performance. The gains follow a positive reassessment from Wall Street, highlighting strengthening fundamentals in the energy sector.

Upgrade Provides Catalyst

The recent surge was notably influenced by a June 29 upgrade from TD Cowen. Analyst Jason Gabelman raised his rating for both PBF Energy and Delek US, citing a favorable environment for the refining industry.

According to Gabelman's analysis, PBF Energy is positioned to benefit from robust refining margins and possesses the highest earnings leverage to refining crack spreads among its peers. The analyst projected the company could generate $2 billion in free cash flow through the remainder of 2026, which would support significant debt reduction and cash generation.

Underlying Fundamentals

Prior to the upgrade, analysis from Investing.com's models had pointed to several positive underlying factors for PBF Energy. The source highlighted the following points as contributing to the stock's potential:

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• Valuation: The stock was trading below its book value with a price-to-earnings ratio of approximately 10.
• Earnings Turnaround: PBF reported a significant first-quarter earnings beat and benefited from the restart of its Martinez refinery.
• Shareholder Returns: The company offered a dividend yield of around 2.7% at the time of its analysis.
• Cost Management: The firm noted PBF had already achieved $230 million in savings as part of a larger cost-reduction program.

Broader Energy Sector Gains

The rally in PBF and Delek reflects a wider trend of positive performance across the energy sector in July. According to data from Investing.com, other notable performers this month include:

• PBF Energy (PBF): +26.75%
• Kosmos Energy (KOS): +23.15%
• Dorian LPG (LPG): +18.44%
• SM Energy (SM): +15.51%

Since being highlighted by the source's models, Delek US shares have gained 61.90% and PBF Energy shares are up 45.57%, according to Investing.com.