Arko upgraded to Buy after spinning off Arko Petroleum, boosting value and cutting debt.

Arko has been upgraded to a Buy rating following the spin-off of Arko Petroleum (APC), which raised $207 million through an IPO. This capital allowed Arko to significantly reduce its debt, lowering leverage to 2.9x EBITDA while maintaining about 94% voting control. Despite operating fewer stores, Arko's adjusted EBITDA grew 65.1% year-over-year, driven by cost reductions and higher fuel margins, although there are concerns about sustainability. Valuation models suggest Arko's equity could reach around $9.00 per share, with potential for further gains if the market re-rates the company after the carve-out.