Darling Ingredients Inc Dossier - Source-backed chat

Darling Ingredients Inc

DARNYSE

SectorConsumer Staples

IndustryPackaged Foods

Beta (adjusted)1.00

Intrinsic Value $52.28median of 5 methods · middle span $37-$56based on filings through 4 Jul 2026

Market Price $61.64Price as of 1 Oct 2026

OvervaluedIntrinsic value is 15% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $9.7B

Enterprise Value $13.4B

Shares Outstanding 162.6M diluted

Moat Rating Narrow

Next Earnings Date29 Oct 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Darling entered the second half of 2026 with materially stronger earnings and cash generation: second-quarter combined Adjusted EBITDA was $741.7 million, including $389.2 million representing Darling's share of Diamond Green Diesel Adjusted EBITDA, while core ingredients Adjusted EBITDA was $352.5 million. The company is directing cash toward deleveraging, targeting fiscal-year-end net debt at or below $3 billion and leverage below 2.0x, while retaining capital-return flexibility through a refreshed $1 billion repurchase authorization. Additional optionality comes from the pending collagen and gelatin combination with Tessenderlo, in which Darling expects to own 85%. The offset is substantial dependence on volatile renewable-fuel economics and policy incentives, plus execution risk around deleveraging and portfolio actions. With strong momentum but a wide range of sustainable earnings outcomes, Hold is the balanced conclusion.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets12 analysts · as of 18 Aug 2026

Low · most bearish analyst$65.00

Mean target$78.58

High · most bullish analyst$90.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$65.0023%

DGD margins retrace sharply because of commodity, credit or policy pressure; core ingredients Adjusted EBITDA falls below the guidance floor; or the production-tax-credit proceeds and debt reduction are delayed. A year-end leverage ratio at or above 2.0x would constrain capital returns and increase sensitivity to cyclical earnings.

Base CaseCentral scenario

$78.5857%

Matches the consensus mean

Renewable-fuel profitability moderates from the exceptionally strong second quarter but remains commercially supportive, core ingredients Adjusted EBITDA lands within management's $325 million-$340 million Q3 range, and deleveraging progresses toward the year-end objectives.

Bull CaseUpside scenario

$90.0020%

Diamond Green Diesel economics remain robust relative to 2025, core ingredients performance stays at or above the Q3 guidance range, the approximately $150 million tax-credit sale closes on schedule, and net debt falls to or below $3 billion. Successful formation and integration of the majority-owned collagen venture and disciplined execution of the repurchase authorization support a higher equity value.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Second-quarter 2026 combined Adjusted EBITDA reached $741.7 million versus $249.5 million a year earlier, demonstrating substantial operating and renewable-fuel earnings recovery.
Darling received $280 million of DGD-related cash distributions in the second quarter and announced a further approximately $150 million production-tax-credit sale expected to fund by the end of Q3.
Management expects fiscal-year 2026 net debt at or below $3 billion and leverage below 2.0x, while the board refreshed the share-repurchase authorization to $1 billion.
The proposed collagen and gelatin combination would leave Darling with an 85% interest in a business initially expected to generate approximately $1.5 billion of annual revenue.

Key Investment Risks

DGD earnings are highly exposed to renewable-fuel prices, feedstock costs, government mandates and eligibility for production tax credits.
Net debt was approximately $3.79 billion and the preliminary leverage ratio was 2.3x at July 4, 2026, leaving execution risk around management's year-end targets.
Core earnings remain exposed to animal by-product volumes, commodity prices, disease outbreaks, foreign exchange and global trade conditions.
The collagen transaction remains subject to regulatory approval, and expected scale, innovation and integration benefits may not be realized.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.