Darling Ingredients Inc. DAR believes it has reached a clear “inflection point,” driven largely by the finalization of the Renewable Volume Obligation (“RVO”) in late March 2026. This regulatory clarity has fundamentally shifted the operating environment for Diamond Green Diesel (“DGD”), Darling Ingredients’ joint venture, providing a "clear path forward" that is expected to strengthen results throughout the year.
The durability of these tailwinds is evidenced by the immediate market reaction. The constructive RVO has already led to favorable upward movement in fat prices, as improving regulatory clarity and stronger renewable diesel demand continue to tighten feedstock markets. In the first quarter of 2026, DGD reported robust performance with 272.4 million gallons sold at an average EBITDA of $1.11 per gallon. Results were further supported by a favorable lower-of-cost-or-market inventory valuation adjustment of approximately $48.4 million attributable to Darling Ingredients.
Importantly, the renewable diesel recovery is creating benefits beyond the Fuel segment alone. As renewable diesel demand increases competition for feedstocks, Darling Ingredients’ Feed segment is also expected to benefit from stronger fat pricing trends, which management believes should remain a “nice tailwind” throughout 2026.
Overall, the improving regulatory backdrop and strengthening renewable diesel demand are contributing to a more favorable operating environment for Darling Ingredients, supporting momentum across key areas of the business.
What Do the Latest Metrics Say About Darling Ingredients?
Darling Ingredients, which competes with Tyson Foods Inc. TSN and Ingredion Inc. INGR, has seen its shares rally 77.8% in the past year against the industry’s 24.4% decline. Shares of Tyson Foods have risen 22.2%, while Ingredion has declined 21.7% during the same period.
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From a valuation standpoint, Darling Ingredients’ forward 12-month price-to-earnings ratio stands at 13.49, slightly lower than the industry’s 13.65. The company is trading at a discount to Tyson Foods (with a forward 12-month P/E ratio of 15.37) while trading at a premium to Ingredion (9.32).
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The Zacks Consensus Estimate for Darling Ingredients’ current fiscal-year sales and earnings per share implies year-over-year growth of 7.1% and 567.7%, respectively.
Darling Ingredients currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).