Margin Expansion Over Volume Growth in Strong Environment - Investor Day Recap

Research evidence excerpt

Margin Expansion Over Volume Growth in Strong Environment - Investor Day Recap

Next-Generation Fuels: Biofuels

Darling Ingredients

TD SECURITIES (USA) LLC COMPANY UPDATE

May 12, 2026

Price: $63.82 (05/11/2026) Margin Expansion Over Volume Growth in

Price Target: $76.00 Strong Environment - Investor Day Recap

BUY (1)

ESG SCORE: 59/100

Jason Gabelman THE TD COWEN INSIGHT

646 562 1309

DAR cash generation should enable debt falling below target by early 2027, in-line with

jason.gabelman@tdsecurities.com

forecast. It did not provide capital priorities once target is achieved, though is unlikely to do

Will Avila large scale M&A. The margin environment for its businesses are strong, while it introduced

646 562 1344 $150MM - $300MM upside from Feed margin expansion and estimated $80MM from Food not

will.avila@tdsecurities.com

in our estimates. Maintain Top Pick.

Key Data

Symbol NYSE: DAR Maintain Top Pick, $76 PT

Beta: 1.07

DAR guided mid-cycle EBITDA to a level that implies 8.8x EV/EBITDA, above historical trading

52-Week Range: $64.84-$29.74

range; however, EBITDA should be higher than mid-cycle in 2026 and 2027, with deleveraging

Market Cap: $10.1B

bringing the multiple down to 7.4x in 2027. It confirmed TD Cowen forecast that debt should

Net Debt (MM): $4,208.8 hit target levels slightly after YE26, while it guided to upside in both Feed and Food from

Cash/Share: $3.42 margin expansion not currently in our estimates. DAR did not commit to capital allocation

Dil. Shares Out (MM): 161.0 priorities once debt is paid down (options include dividend, buyback, organic growth, tuck-

Enterprise Value

$14,553.9 ins), though it talked down large-scale M&A.

(MM):

BV/Share: $30.68 The earnings environment for DAR remains strong from waste oil prices and biofuel regulations