Best Smidcap Ideas: RINs Drive DAR Higher

Research evidence excerpt

Best Smidcap Ideas: RINs Drive DAR Higher

TD Cowen Next-Generation Fuels: Biofuels

Global Research

Darling Ingredients

TD SECURITIES (USA) LLC BEST SMIDCAP IDEAS 2026

Price: $53.22 (06/22/2026) Best Smidcap Ideas: RINs Drive DAR Higher

Price Target: $70.00 (Prior $76.00)

BUY (1)

ESG SCORE: 59/100

Jason Gabelman THE TD COWEN INSIGHT

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DAR should be a primary beneficiary of a bullish RIN program set earlier this year that the US

jason.gabelman@tdsecurities.com

cannot meet with its own biofuel capacity. Recent RIN data and pricing support this view,

Will Avila though it has not fully materialized in DAR equity. We see RIN prices and renewable diesel

646 562 1344 margins moving higher through the year, supporting high equity value and deleveraging.

will.avila@tdsecurities.com

Anthony Petrino Summary Of Our Thesis

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DAR equity is reflecting some, but not all, of the value driven by recently passed governmentanthony.petrino@tdsecurities.com

regulations. We believe these regulations will drive an improvement in biomass-based distillate

Jeremy Meanwell (BBD margins) in 2026 with incremental upside in 2027. Higher EBITDA should drive the equity

646 562 1374

higher with additional support from deleveraging.

jeremy.meanwell@tdsecurities.com

What Is Underappreciated Or Misunderstood?

Key Data

Symbol NYSE: DAR The US EPA established a Renewable Volume Obligation (RVO) for 2026-27 that can only be

Beta: 1.03 met with US producers running all out and requiring it to import feedstock from international

52-Week Range: $64.84-$29.74 sources. We previously thought the US would not generate enough RINs to meet the RVO, and

Market Cap: $8.5B draw down on the RIN bank fully by YE27. However, utilization was lower than expected in