Citi analyst Thomas Palmer upgraded Darling Ingredients to Buy from Neutral with a $48 price target. The firm says that after a “tough stretch” for the company, it sees “better times ahead.” With the stock down 25% year-to-date, downside to 2024E EBITDA estimates is priced in, the analyst tells investors in a research note. Citi sees “much improved earnings” in 2025 for Darling, even if the agriculture cycle does not rebound, driven by sales of higher-margin sustainable aviation fuel at Diamond Green Diesel, higher low carbon fuel standards credit prices in California, and favorable U.S. biofuels tax credit changes. Though these items might not help the company’s earnings until 2025, visibility surrounding them could improve in the coming months and send the share price higher, contends Citi.
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