Darling Ingredients Inc. DAR has become one of the strongest-performing stocks in the consumer staples space in recent months, driven by a sharp recovery in renewable diesel margins, improving operational execution and strengthening earnings momentum. Shares of DAR have surged 84.3% over the past six months, significantly outperforming the broader market and most industry peers. Over the same period, the S&P 500 advanced 11.7% and the Zacks Consumer Staples sector gained 4.3%, while the Food - Miscellaneous industry declined 16.7%.
DAR has also substantially outperformed several key peers, such as Archer-Daniels-Midland Company ADM, Tyson Foods, Inc. TSN and Ingredion Incorporated INGR. ADM and TSN gained 35.7% and 23.5%, respectively, while INGR declined 1.4% over the same period.
DAR Stock Past 6 Months Performance
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As of the latest trading session, Darling Ingredients closed at $63.82, just 3.3% below its 52-week high of $66.02 reached on May 5, 2026. The stock is trading above the 50 and 200-day moving averages. Trading above these averages signals bullish sentiments.
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This strong outperformance has put Darling Ingredients firmly in the spotlight, reinforcing investor confidence in its improving business momentum and recovery outlook. The recent rally suggests that strengthening fundamentals, improving renewable diesel economics and better operational execution may be supporting a more sustainable turnaround story for the stock. Let’s take a closer look at the key drivers behind DAR’s rally and what they could mean for investors going forward.
What’s Fueling Darling Ingredients’ Rally?
Darling Ingredients’ rally is being fueled by a sharp rebound in profitability and operational momentum across both its core ingredients business and the Diamond Green Diesel (“DGD”) joint venture. In the first quarter of 2026, the company reported earnings per share of 83 cents compared with a loss a year earlier, while combined adjusted EBITDA more than doubled to $406.8 million. Revenues also climbed 12.3% to $1,550.8 million, reflecting stronger execution, better margins and improved market conditions. Management described the quarter as an “inflection point” for earnings power, reinforcing investor confidence in the company’s recovery trajectory.
Another major catalyst is the turnaround in renewable diesel economics. DGD generated $151.2 million in EBITDA during the first quarter, supported by stronger renewable fuel margins, higher diesel prices and a favorable Renewable Volume Obligation environment. Management noted that finalized renewable fuel rules have made future demand for renewable diesel clearer and stronger. At the same time, higher global energy prices are making renewable fuels more cost-competitive compared with traditional fuels. Investors are increasingly optimistic that improved biofuel policies and stronger feedstock pricing can sustain elevated earnings through the rest of 2026.
The company’s core ingredients segments are also showing strong operational improvements. Feed Ingredients benefited from disciplined risk management, higher poultry volumes, better throughput and stronger gross margins, while the Food Ingredients business experienced rising demand for collagen and gelatin products, especially in Europe and Asia. Darling Ingredients highlighted growth opportunities tied to health and nutrition trends, including its Nextida glucose-control product and broader demand for collagen-based functional foods. These developments have strengthened the narrative that DAR is not only an energy-transition play, but also a diversified specialty ingredients company with multiple growth engines.
Finally, investors are responding positively to Darling Ingredients' improving balance sheet outlook and cash generation potential. The company monetized $45 million in production tax credits during the first quarter of 2026 and reiterated its focus on deleveraging, with management targeting debt reduction toward the $3 billion level. Stronger EBITDA, rising renewable diesel margins and expectations for additional free cash flow have improved sentiment around financial flexibility and future shareholder value creation. Guidance for second-quarter core ingredients EBITDA of $260 million to $275 million further reinforced expectations that the company’s earnings momentum could continue through the year.
How Are the Consensus Estimates Faring for DAR?
Reflecting the positive sentiment around Darling Ingredients, the Zacks Consensus Estimate for earnings per share has seen upward revisions. Over the past seven days, the EPS estimate for fiscal 2026 and 2027 has inched up 10 cents to $4.54 and 8 cents to $4.93, respectively. These estimates indicate expected year-over-year growth rates of 567.7% and 8.5%, respectively.
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Darling Ingredients Stock’s Valuation
Darling Ingredients is currently trading at an attractive valuation compared with the broader industry. The stock's forward 12-month P/E ratio stands at 13.64, slightly down from the industry average of 13.66, highlighting its appeal as a value opportunity. Compared with peers, the company is trading at a discount to Archer-Daniels-Midland (with a forward 12-month P/E ratio of 16.99) and Tyson Foods (15.07). It is trading at a premium compared with Ingredion’s forward 12-month P/E ratio of 9.22.
DAR P/E Ratio (Forward 12 Months)
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Here’s Why Darling Ingredients Can Be an Attractive Play
Darling Ingredients’ recent rally is supported by improving renewable diesel economics, stronger operational execution and a sharp rebound in earnings. The company’s recovery in Diamond Green Diesel margins, improving demand trends across its ingredients business and focus on debt reduction are strengthening the long-term growth outlook.
While the stock has rallied sharply in recent months, Darling Ingredients still trades at a reasonable valuation compared with several industry peers. With improving earnings momentum, stronger cash flow potential and favorable industry trends, this Zacks Rank #2 (Buy) stock appears well-positioned for investors seeking long-term growth opportunities.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Archer Daniels Midland Company (ADM): Free Stock Analysis Report
Tyson Foods, Inc. (TSN): Free Stock Analysis Report
Darling Ingredients Inc. (DAR): Free Stock Analysis Report
Ingredion Incorporated (INGR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).