Is Darling Ingredients (DAR) Undervalued Following Its Collagen Pivot?

Collagen pivot reshapes Darling Ingredients story

Darling Ingredients (DAR) is drawing attention after highlighting a shift inside its Food segment toward collagen products, where management sees room to lift EBITDA and net cash using existing facilities.

The business already generates a meaningful share of global collagen, with recent commentary pointing to roughly 30% of worldwide supply and growing demand in Asia that is influencing how the portfolio is being mixed.

Recent trading has been choppy for Darling Ingredients, with a 23.86% 90-day share price return and a 76.65% year-to-date share price gain contributing to a 104.90% 1-year total shareholder return, which points to strong momentum building around the collagen pivot story.

Scan beyond Darling Ingredients to see how other ingredient and specialty food producers stack up on quality and momentum inside our hand-picked 16 high quality undiscovered gems list.

Darling Ingredients has surged, yet the share price still sits well below both analyst targets and intrinsic estimates. Does that gap reflect lingering doubts on the collagen story, or an opening in plain sight for valuation work next?

Most Popular Narrative: 15% Undervalued

On the most followed narrative, Darling Ingredients screens below an assessed fair value of $78.58 versus the latest close at $66.49. This frames the recent collagen momentum and renewable diesel story against a still cautious earnings and policy backdrop.

Policy changes favoring U.S.-sourced renewable diesel feedstocks (higher domestic fat prices, reduced foreign competition) and increasing U.S. biofuel mandates are expected to structurally expand demand and improve pricing power in Darling's Feed and Fuel segments, which should drive higher revenue and margin expansion through 2026 and beyond.

See why 10 investors see Darling Ingredients as 15% undervalued.

Result: Fair Value of $78.58 (UNDERVALUED)

Still, the Darling Ingredients narrative can be knocked off course if renewable fuel policy becomes less supportive or if high leverage makes deleveraging slower than hoped.

Find out about the key risks to this Darling Ingredients narrative.

Next Steps

If the Darling Ingredients story feels pulled between promise and risk, that tension is exactly where you should dig in and decide fast. To weigh both the upside case and the pressure points yourself, start with the 4 key rewards and 2 important warning signs.

Looking for more Darling Ingredients style ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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