We came across a bullish thesis on Darling Ingredients Inc. at TallGuy’s Valueinvestorsclub.com. In this article we will summarize the bulls’ thesis on DAR. Darling Ingredients Inc. stock was trading at $37.01 on December 2. DAR’s trailing and forward P/E were 54.88 and 11.07 respectively, according to Yahoo Finance.
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Darling Ingredients appears to be well positioned heading into 2026, supported by favorable trends in biofuels policies that are expected to sustain strong demand and prices for fats and used cooking oil (UCO). This context should drive the return to profitability of Diamond Green Diesel (DGD), of which Darling owns 50%.
Core Darling, which covers feed, food and fuel, is projected to generate between $1 billion and $1.2 billion in adjusted EBITDA, with an additional contribution of $400 million to $600 million from DGD, resulting in total EBITDA of $1.4 billion to $1.8 billion. With an enterprise value of $8.8 billion and priorities focused on deleveraging and capital returns, Darling’s improving earnings trajectory and policy tailwinds set up a strong recovery.
As the Renewable Volume Obligation (RVO) and exemptions for small refineries are finalized, policy clarity should drive revaluation of raw material prices and the RIN. A proposed 50% reduction in RINs for foreign feedstocks and biodiesel has already raised domestic feedstock prices, while supply shortages may firm up LCFS credits in California. DGD, the best-positioned renewable diesel (RD) and sustainable aviation fuel (SAF) asset, benefits from superior Gulf Coast logistics and the flexibility to operate entirely on domestic feedstock if required.
The company also plans to spin off its Food segment into a new joint venture, Nextida, with PB Leiner. Nextida’s next line of GLP-1 stimulant supplements, Nextida GC, could double the joint venture’s EBITDA from ~$340 million, implying a valuation above 75% of Darling’s market cap at peer multiples. With regulatory clarity, Nextida’s turnaround and capital returns restored, Darling could see significant upside as political uncertainty fades and operational momentum accelerates.
Previously we covered a bullish thesis on Darling Ingredients Inc. (DAR) by Elliot in March 2025, which highlighted the company’s integration into the feed, food and fuel markets and its scale advantage in processing. The stock has appreciated 2.54% since our coverage due to commodity headwinds. The thesis still stands, as TallGuy shares a similar view, but emphasizes policy-driven tailwinds and the upcoming Nextida spinoff.