Analyst Jason Gabelman of TD Cowen maintained a Hold rating on Darling Ingredients, retaining the price target of $34.00.
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Jason Gabelman has given his Hold rating due to a combination of factors affecting Darling Ingredients. The company has reduced its FY25 EBITDA guidance, citing weaker DGD margins as a significant reason for this adjustment. Gabelman notes that the market may remain cautious until there is a final RVO rule, expected in the fourth quarter of 2025, which could potentially improve industry margins.
Additionally, Darling Ingredients is trading at a multiple that is slightly above its historical average, which suggests that the market might not be fully comfortable with the company’s outlook until there are clearer signs of margin improvement. The company’s strategy to potentially buy back shares could signal confidence in future margin improvements, but this is limited by its balance sheet constraints. Overall, these factors contribute to Gabelman’s decision to maintain a Hold rating on the stock.
Gabelman covers the Energy sector, focusing on stocks such as Equinor ASA, NextDecade, and Exxon Mobil. According to TipRanks, Gabelman has an average return of 8.4% and a 57.51% success rate on recommended stocks.
In another report released today, Robert W. Baird also downgraded the stock to a Hold with a $36.00 price target.