Food processor Darling Ingredients's Q2 net income falls

Overview

• Darling Q2 net sales of $1,481 mln

• Net income for Q2 declines due to lower earnings at Diamond Green Diesel

• Co forms Nextida, a new collagen and gelatin joint venture

Outlook

• Company anticipates improvement in Q3 led by strengthening fat prices

• Darling Ingredients adjusts 2025 Combined Adjusted EBITDA outlook to $1.05-$1.10 bln

• Company cites uncertainty from small refinery exemptions affecting 2025 outlook

• Global tariffs present supply chain disruptions, company remains flexible

Result Drivers

• DGD PERFORMANCE - Lower earnings at Diamond Green Diesel impacted net income, with 248.6 mln gallons sold at $0.36 per gallon EBITDA

• MARKET DYNAMICS - Co cites improving market dynamics and supportive biofuel regulations as positive factors for renewables business

• NEXTIDA LAUNCH - Formation of Nextida joint venture aims to expand collagen business in health and wellness markets

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy"

• Wall Street's median 12-month price target for Darling Ingredients Inc is $47.00, about 21.6% above its July 23 closing price of $36.86

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 12 three months ago

Press Release: ID:nBw58xVpna