In a report released today, Jason Gabelman from TD Cowen upgraded Darling Ingredients to a Buy, with a price target of $45.00.
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Jason Gabelman has given his Buy rating due to a combination of factors, primarily the anticipated improvement in Darling Ingredients’ DGD margins. The expectation is that industry regulations, particularly the Renewable Volume Obligation (RVO) for 2026-2027, will be finalized soon, leading to more favorable conditions for biofuels. This regulatory environment is expected to enhance EBITDA, thereby increasing equity value and supporting the company’s deleveraging efforts.
Furthermore, Gabelman anticipates a strengthening biofuel margin environment beginning in 2026, continuing through at least 2027. This is supported by improved indicator margins and the potential impact of California’s LCFS amendment, which could drive credit prices higher. The company’s leverage, which increased due to acquisitions and delays in cash inflows from tax credit changes, is expected to improve, further supporting the stock’s value. Overall, these factors contribute to a positive outlook for Darling Ingredients, justifying the Buy rating.
According to TipRanks, Gabelman is a 4-star analyst with an average return of 6.6% and a 57.92% success rate. Gabelman covers the Energy sector, focusing on stocks such as Chevron, TotalEnergies, and Shell.
In another report released on November 19, Bank of America Securities also maintained a Buy rating on the stock with a $50.00 price target.