Analyst Andrew Strelzik of BMO Capital maintained a Buy rating on Darling Ingredients (DAR – Research Report), with a price target of $51.00.
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Andrew Strelzik’s rating is based on several factors including Darling Ingredients’ expected acceleration in EBITDA in 2025, driven by an improving operational environment and various growth catalysts. Despite the underperformance in 2024, DAR is well-positioned to benefit from increased rendering, renewable identification numbers (RIN), low carbon fuel standard (LCFS) values, and expansion in sustainable aviation fuel (SAF) production. Strelzik highlights that DAR’s current trading valuation is attractive relative to historical levels, given its anticipated business trajectory improvement.
Moreover, the margins for Darling Ingredients are projected to improve significantly due to the switch to production tax credits (PTC) and recovery in D4 RIN values. The Feed segment is expected to recover with strengthened demand for low carbon feedstocks, while the Food segment shows potential for positive EBITDA growth due to strategic shifts towards value-added categories. Strelzik believes that these fundamentals, along with DAR’s vertically integrated model and capacity for earnings growth, support the Buy rating.
In another report released today, Scotiabank also maintained a Buy rating on the stock with a $45.00 price target.