Is Delek Logistics Partners LP overvalued or undervalued?

As of 25 February 2025, the valuation grade for Delek Logistics Partners LP has moved from risky to very attractive, indicating a significant improvement in its investment appeal. The company is currently considered undervalued, with a P/E ratio of 14, which is notably lower than its peer DT Midstream, Inc. at 27.95 and slightly higher than Equitrans Midstream Corp. at 11.32. Additionally, the EV to EBITDA ratio stands at 15.04, which is competitive compared to the industry average.
Delek Logistics Partners LP also boasts a remarkable ROE of 161.48%, suggesting strong profitability relative to shareholder equity. In contrast, NuStar Energy LP, another peer, has a P/E ratio of 13.20, reinforcing the attractiveness of Delek's valuation. While the stock has underperformed slightly compared to the S&P 500 over the past year, its strong fundamentals and favorable valuation metrics position it as a compelling investment opportunity.