Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - UBS has reiterated its Buy rating and $58.00 price target on Darling Ingredients (NYSE:DAR) despite lowering earnings estimates for the remainder of 2025. The stock, currently trading at $31.25 with a market cap of $4.94 billion, appears undervalued according to InvestingPro analysis.
The investment firm adjusted its third-quarter 2025 EBITDA estimate to $256 million, below the Street consensus of $269 million, while also reducing its fourth-quarter 2025 EBITDA forecast to $284 million compared to Street expectations of $304 million.
UBS lowered its full-year 2025 EBITDA estimate to $985 million from $1,103 million, falling below the company’s own guidance, but noted that the current weakness in the stock price already reflects these concerns.
For the third quarter of 2025, UBS projects Feed Segment earnings of $168 million (up from $128 million in Q2), Food Segment earnings of $73 million (up from $70 million in Q2), and Fuel segment earnings of $24 million (down from $61 million in Q2).
The firm attributes the weaker outlook primarily to reduced earnings in the renewable diesel (RD) business and expects that downtime at Diamond Green Diesel (DGD) plants, including economic run cuts, will likely impact volumes and earnings in the third quarter.
In other recent news, Darling Ingredients reported financial results for the second quarter of 2025 that fell short of analyst expectations. The company posted earnings per share of $0.08, significantly below the forecasted $0.30, and revenue of $1.19 billion, which did not meet the projected $1.49 billion. Following these results, Baird downgraded Darling Ingredients from Outperform to Neutral and adjusted its price target from $40.00 to $36.00, citing concerns over the Renewable Identification Number (RIN) market. Meanwhile, Raymond James maintained its Strong Buy rating with a $60.00 price target, highlighting Darling’s strategic advantages in the sustainable fuels sector. The Environmental Protection Agency’s recent proposal regarding renewable fuel standards also impacted the company, as it considers reallocating small refinery exemptions for the coming years. These developments reflect ongoing changes in the renewable fuels market that could influence Darling Ingredients’ operations.
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