Analyst Dushyant Ailani from Jefferies maintained a Buy rating on Darling Ingredients (DAR – Research Report) and decreased the price target to $64.00 from $70.00.
Dushyant Ailani has given his Buy rating due to a combination of factors including Darling Ingredients’ performance and future prospects. In the first quarter of 2024, the company’s EBITDA was approximately $280 million, which was below consensus and Jefferies’ own estimates. However, when excluding a one-time inventory adjustment in their Food segment, the EBITDA was roughly in line with expectations. The shortfall was primarily due to weaker margins across all segments, but this was somewhat mitigated by stronger volumes and capture rates in Darling’s Diamond Green Diesel (DGD) venture.
Despite the initial figures falling short, Ailani remains optimistic about Darling Ingredients’ future, particularly as we approach 2025. The firm introduced its full-year EBITDA guidance at about $1.35 billion, which is below consensus expectations. Yet, this forecast is seen as conservative by Jefferies, and Ailani anticipates a more constructive outcome as the company ramps up its Sustainable Aviation Fuel (SAF) production. This ramp-up is expected to significantly contribute to the company’s growth and performance in the coming year, underpinning the Buy rating assigned to the stock.
In another report released on April 18, Piper Sandler also assigned a Buy rating to the stock with a $55.00 price target.
Based on the recent corporate insider activity of 75 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DAR in relation to earlier this year.
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Darling Ingredients (DAR) Company Description:
Darling Ingredients, Inc. engages in the development and production of natural ingredients from edible and inedible bio-nutrients. It operates through the following segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Feed Ingredients segment includes ingredients business such as fats and proteins used cooking oil, trap grease and food residuals collection, the Rothsay ingredients, and the ingredients and specialty products. The Food Ingredients segment comprises gelatin, natural casings and meat by-products, and specialty products activities. The Fuel Ingredients segment consists of biofuel and bioenergy services. The company was founded in 1882 and is headquartered in Irving, TX.
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