Darling Ingredients shares climb as EPA renewable diesel mandate boosts margins
The company reported first-quarter sales of $1.6 billion, up from $1.4 billion in the same period the previous year, while Aristotle Capital Management highlighted the stock as a leading contributor to its Core Equity Fund.
Shares of Darling Ingredients surged in early May 2026, driven by positive momentum ahead of the finalisation of the US Environmental Protection Agency’s Renewable Volume Obligation. The RVO, finalised in late March 2026, exceeded market expectations, a development anticipated to bolster renewable diesel margins for Darling’s joint venture, Diamond Green Diesel.
Financially, the company reported first-quarter 2026 sales of $1.6 billion, an increase from $1.4 billion in the same period the previous year. Aristotle Capital Management identified Darling Ingredients as a leading contributor to its Core Equity Fund’s performance in the first quarter of 2026. By mid-May 2026, the stock had closed at $62.26 per share, reflecting a 52-week gain of 78.31% and a market capitalisation of $10.00 billion.
Aristotle Capital Management released its “Core Equity Fund” first-quarter 2026 investor letter, noting Darling Ingredients as a top performer. The fund’s letter stated that Darling contributed to performance in the first quarter, as the stock continued to show momentum ahead of the finalisation of the RVO, which came in the final days of March. The RVO was ahead of expectations and bodes well for continued improvement in renewable diesel margins for Darling’s joint-venture Diamond Green Diesel.
Darling Ingredients is a leader in converting edible and inedible bio-nutrients to sustainable natural ingredients. The company’s stock performance occurred against a backdrop of a declining US equity market during the first quarter of 2026, with the S&P 500 Index falling by 4.33%. The fixed-income sector also saw a downturn, with the Bloomberg U.S. Aggregate Bond Index falling by 0.05%.
In the quarter, the Aristotle Core Equity Fund (Class I-2) posted a total return of -4.45%, compared to the S&P 500 Index’s -4.33% return. The fund’s underperformance in the quarter was driven by the allocation effect, while security selection contributed positively. In this environment, the fund continues to focus on companies experiencing secular tailwinds or robust product-driven cycles.
Hedge fund interest in Darling Ingredients slightly decreased, with 47 portfolios holding the stock at the end of the fourth quarter, down from 51 in the previous quarter. The company is not on the list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.
While the company acknowledged the potential of Darling Ingredients as an investment, some analysts believe certain AI stocks offer greater upside potential and carry less downside risk. The stock’s recent performance highlights the market’s focus on renewable energy infrastructure and regulatory tailwinds in the bio-nutrient sector.
