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Investing.com - BofA Securities initiated coverage on Darling Ingredients (NYSE:DAR) with a Buy rating and a price target of $45.00 on Wednesday.
The price target implies approximately 40% upside potential for the integrated biofuel, biofuel feedstock, and food ingredients company.
BofA Securities analyst Conor Fitzpatrick believes Darling Ingredients is positioned to benefit from an increase in Renewable Identification Numbers (RINs) prices, driven by federal policy changes that aim to strengthen demand for renewable diesel and higher-cost biodiesel.
The firm expects additional upside potential from the company’s deleveraging efforts and initiatives to unlock value in its Food Ingredients business segment.
The Food Ingredients division currently represents Darling’s smallest segment by EBITDA contribution, according to the research note.
In other recent news, Darling Ingredients announced an agreement to sell $125 million in production tax credits from its joint venture with Valero Energy Corporation, Diamond Green Diesel. The proceeds from this sale are expected to be received in 2025, contingent upon certain conditions. UBS reiterated its Buy rating on Darling Ingredients, maintaining a price target of $58.00, despite lowering earnings estimates for the third and fourth quarters of 2025. The investment bank’s revised estimates place third-quarter EBITDA at $256 million and fourth-quarter EBITDA at $284 million, both below Street consensus. Additionally, Darling Ingredients’ Chief Operating Officer for North America, Matt Jansen, has departed, qualifying for severance benefits per the company’s agreement. The Environmental Protection Agency’s proposal of new renewable fuel standards has also been a point of focus, impacting the company’s outlook. Darling Ingredients is actively marketing additional tax credits generated in 2025 for potential sale. These developments highlight significant movements within the company and its strategic financial planning.
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