Darling Ingredients Inc. (DAR) is emerging as a compelling long-term play in the specialty chemicals and sustainable protein sectors, driven by rising demand for alternative proteins and circular economy solutions. Analysts highlight strong margins, diversified revenue streams, and strategic acquisitions as key catalysts for upside potential.
- DAR processes over 3.8 million metric tons of raw materials annually across 40+ facilities
- 2024 revenue of $2.1 billion, up 12% YoY, with animal protein segment growing 15%
- Renewable oils segment up 20% due to regulatory tailwinds in the U.S. and EU
- Strategic acquisition of a European facility for $140 million expected to yield $50M in annual synergies by 2026
- Gross margins above 35%, with 25% lower processing costs due to proprietary technology
- Trading at a 15% discount to sector median EV/EBITDA, with institutional ownership at 64%
Darling Ingredients Inc. (DAR) is advancing a transformative business model centered on converting waste streams into high-value animal proteins, specialty fats, and bio-based chemicals. With over 40 facilities across North America and Europe, the company processes more than 3.8 million metric tons of raw materials annually, including meat by-products, used cooking oil, and food waste. This operational scale enables consistent gross margins above 35%, outperforming peers in the basic materials sector. The company’s revenue reached $2.1 billion in 2024, a 12% year-over-year increase, fueled by rising demand from the pet food, aquaculture, and renewable fuels industries. Specifically, its animal protein segment grew 15% as global pet food consumption continues to expand, particularly in Asia and Latin America. Meanwhile, its renewable oil and grease segment saw a 20% surge, supported by U.S. and EU mandates for low-carbon fuel standards. Darling’s strategic acquisitions—including the 2023 purchase of a European rendering facility for $140 million—have expanded its footprint in high-growth markets and enhanced feedstock security. These moves are expected to generate $50 million in annual synergies by 2026. Additionally, the company’s proprietary technology platform, which enables precise separation and purification of feedstocks, contributes to a 25% lower processing cost compared to industry averages. Market participants are taking notice: DAR’s stock has outperformed the S&P 500 Materials Sector Index by 18 percentage points over the past 12 months. Institutional ownership has increased to 64% as of Q4 2024, signaling confidence among long-term investors. The company remains undervalued relative to its peers, trading at a 15% discount to the sector’s median EV/EBITDA multiple.