Core Thesis - Darling Ingredients Inc. is well-positioned for growth due to favorable biofuel policy trends, which are expected to sustain strong demand and pricing for fats and used cooking oil [2] - The company is projected to generate total adjusted EBITDA of $1.4–$1.8 billion, with a significant contribution from its joint venture, Diamond Green Diesel [3] Financial Performance - Darling's trailing and forward P/E ratios are 54.88 and 11.07 respectively, indicating a potential undervaluation based on future earnings [1] - The enterprise value of Darling Ingredients is $8.8 billion, with a focus on deleveraging and capital returns [3] Policy Environment - The finalization of the Renewable Volume Obligation (RVO) and small refinery exemptions is expected to drive revaluation of feedstock and RIN prices, positively impacting Darling's operations [4] - A proposed 50% reduction in RINs for foreign feedstock and biodiesel has already increased domestic feedstock prices, which may benefit Darling's logistics and operational flexibility [4] Strategic Initiatives - The company plans to spin off its Food segment into a new joint venture, Nextida, which could significantly enhance EBITDA and market valuation [5] - The upcoming GLP-1-stimulating supplement line from Nextida is expected to double the joint venture's EBITDA from approximately $340 million, potentially exceeding 75% of Darling's market cap at peer multiples [5] Market Sentiment - The stock has appreciated by 2.54% since previous coverage, reflecting ongoing commodity headwinds, but the bullish thesis remains intact due to policy-driven tailwinds and the Nextida spin-off [6]