We came across a bullish thesis on Darling Ingredients Inc. on The Few Bets That Matter’s Substack. In this article, we will summarize the bulls’ thesis on DAR. Darling Ingredients Inc.’s share was trading at $52.68 as of February 24th. DAR’s trailing and forward P/E were 135.08 and 9.48 respectively according to Yahoo Finance.
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Darling Ingredients (DAR) is the world’s largest renderer, converting animal byproducts like fats, bones, grease, and used cooking oil from slaughterhouses, restaurants, and food processors into usable products across the food-to-fuel chain. The company operates through three segments: Feed, producing animal feed ingredients; Food, supplying collagen and gelatin for food and pharmaceutical applications; and Fuel, providing renewable diesel feedstocks. Additionally, Darling owns a 50% stake in Diamond Green Diesel, a joint venture with Valero, further expanding its renewable diesel production capabilities.
This business model effectively turns waste into value, offering products that remain in demand across all economic conditions, making DAR a defensive investment at its current valuation. Beyond defensiveness, the stock has growth catalysts, most notably regulatory tailwinds around biofuels. Beginning in early 2026, new regulations will require oil companies to purchase significantly more green fuel credits (RINs), creating increased demand for both Darling’s biofuel production and the credits earned through its core rendering operations.
These regulatory changes, coupled with accelerating revenue growth and consistent demand, position Darling for a potential 30%–70% stock upside, corresponding to a 1.5x–2x sales multiple. Technically, the stock appears to have completed a multi-year downtrend, forming a higher low and an early breakout, suggesting attractive entry points around $36–$40.
For investors, the setup offers both equity and options opportunities: selling puts at $30 and buying calls at $50–$55 provides a structured risk/reward aligned with the year-ahead regulatory-driven growth narrative. While timing depends on regulatory adoption, Darling represents a unique combination of defensive characteristics, accelerating growth, and regulatory catalysts, making it a compelling investment with limited downside and substantial upside potential.
Previously, we covered a bullish thesis on Darling Ingredients Inc. (DAR) by Elliot in March 2025, which highlighted the company’s scale leadership in converting animal byproducts into feed, food, and fuel, its strategic acquisitions, and vertical integration through Diamond Green Diesel. DAR’s stock price has appreciated by approximately 45.96% since our coverage. The Few Bets That Matter shares a similar view but emphasizes regulatory tailwinds around biofuels and green fuel credits as near-term growth catalysts.
