Is Darling Ingredients Inc. (DAR) A Good Stock To Buy Now?
Is DAR a good stock to buy? We came across a bullish thesis on Darling Ingredients Inc. on Valueinvestorsclub.com by FreeFlow. In this article, we will summarize the bulls’ thesis on DAR. Darling Ingredients Inc.’s share was trading at $60.34 as of June 2nd. DAR’s trailing and forward P/E were 43.80 and 17.12 respectively according to Yahoo Finance.
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Darling Ingredients is a vertically integrated global renderer of animal fats and used cooking oil, converting bio-based feedstocks into fuels, feed ingredients, and specialty collagen products across a network of more than 80 facilities worldwide. Its Fuel Ingredients segment, anchored by the 50% owned Diamond Green Diesel joint venture with Valero, represents the key earnings driver, with capacity of ~1.2 billion gallons by 2026, including renewable diesel and sustainable aviation fuel.
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The recent EPA Set 2 rule finalized on March 27, 2026 materially tightens Renewable Fuel Standard by increasing blending obligations to ~27 billion RINs, reallocating small refinery exemptions at 70%, and delaying the restrictive half-RIN rule to 2028, collectively creating a structural deficit of 3 billion D4 RINs versus 2025 levels. This imbalance forces marginal high-cost biodiesel producers to bid up RIN prices, lifting profitability across the compliance system.
As a low-cost producer with advantaged access to tallow and used cooking oil, Darling captures widening margins as credit prices rise, unlike soybean-based competitors facing higher feedstock costs. The DGD platform alone is expected to contribute roughly $0.9 billion of EBITDA, supporting total 2026 EBITDA near $2 billion including the resilient feed and food segments.
Under conservative valuation scenarios, the stock implies 70% upside to ~$100 per share at 10x EBITDA, and up to ~100% upside to ~$120 per share at historical 11.5x multiples, with further LFCF-based upside of 60–135% depending on yield assumptions. Additional tailwinds include elevated fuel prices and potential geopolitical disruptions, reinforcing margin resilience and cash generation.
Previously, we covered a bullish thesis on Darling Ingredients Inc. (DAR) by Elliot in March 2025, which highlighted DAR’s vertically integrated waste-to-value model, flexible allocation across feed, food, and fuel segments, and valuation upside driven by EBITDA recovery and sum-of-the-parts re-rating. DAR’s stock price has appreciated by approximately 67.19% since our coverage. FreeFlow shares a similar view but emphasizes EPA Set 2-driven RIN tightening and resulting margin expansion.
