Overview
BofA Securities raised its price objective for Darling Ingredients (NYSE: DAR) to $65.00 from $60.00 while maintaining a Buy rating. The new target implies material upside relative to the prevailing share price of $50.29, which has climbed 59.6% over the last six months. Data from InvestingPro show the shares are trading modestly above a 52-week high of $49.74, underscoring recent market momentum.
Quarterly and segment performance
Darling reported fourth-quarter 2025 adjusted EBITDA of $336 million, beating consensus expectations of $267 million. Every business segment outperformed estimates in the quarter. The Feed segment led the way with EBITDA of $193 million versus a consensus figure of $165 million. The Food segment delivered $82 million in EBITDA, ahead of a $72 million consensus.
In the Fuel segment, excluding Darling's interest in Diamond Green Diesel (DGD), EBITDA was $27 million compared with an expected $24 million. Contribution from DGD itself totaled $85 million, or $97 million when removing a lower-of-cost-or-market (LCM) headwind, exceeding the consensus forecast of $75 million.
Full-year results and balance-sheet progress
Darling's core business produced full-year 2025 EBITDA of $923 million, surpassing management's guidance range of $875 million to $900 million. The company cut net debt by more than $150 million quarter-over-quarter, which reduced its leverage ratio from 3.65x to 2.9x. Liquidity metrics point to improved short-term coverage, with a current ratio of 1.49 indicating that liquid assets exceed near-term obligations.
Guidance and analyst model changes
Management issued guidance for first-quarter 2026 EBITDA excluding DGD of $240 million to $250 million, and guided DGD throughput at 260 million gallons per quarter. In response to these operational results and guidance, BofA Securities raised its fiscal 2026 EBITDA estimate for Darling to $1.6 billion.
Valuation and earnings
Despite the upbeat operational picture, Darling's shares trade at a high multiple by traditional measures, with a price-to-earnings ratio of 75.28 flagged by InvestingPro. The company reported adjusted earnings of $0.35 per share for the fourth quarter, narrowly topping the analyst estimate of $0.34. Revenue for the quarter was $1.71 billion, above consensus of $1.54 billion and up 20.6% from $1.42 billion in the prior year period.
Other analyst activity and notable items
Raymond James increased its price target for Darling to $70 from $69 and maintained a Strong Buy rating, calling out what it views as an inflection point in the renewable fuels sector and highlighting the strategic benefits of Darling's legacy Feed and Food businesses to its sustainable fuels operations. The company also recorded material restructuring charges and faces questions about future performance, which market participants are monitoring.
Context for investors
The upward revisions to analyst targets and the stronger-than-expected operating results emphasize both near-term earnings power and improving leverage metrics. However, valuation remains elevated on an earnings multiple basis and the company has reported restructuring costs and ongoing uncertainties about forward performance.