By Nate Wolf
While the Iran war chokes off petroleum supply from the Persian Gulf, it is a good time to be making fuel made from anything other than oil and gas. Just ask Darling Ingredients.
Darling is one of a handful of companies turning animal fats, cooking oil, and food waste into diesel, jet fuel, fertilizer, and feedstock. One in every six animals used in food production globally passes through its facilities.
Darling rose 1.7% to $63.23 on Thursday, putting the stock on track to extend its winning streak to nine days. After falling by 48% from 2022 through 2025, shares are up 76% in 2026.
While the jet-fuel and fertilizer narrative is a nice contrast to sputtering airline stocks, regulatory changes at home, rather than supply disruptions in the Middle East, are what have analysts on Wall Street most excited.
The Environmental Protection Agency last week finalized new renewable volume obligations, or RVOs, for transportation fuel, which were higher than proposed. The requirements are meant to help biofuel producers and farmers who produce ethanol and to reduce dependency on foreign oil, the EPA said.
"DAR is one of the biggest beneficiaries," UBS analyst Manav Gupta wrote of the new rules. The impact will begin showing up on the company's financial results in the second quarter, Gupta added in a research note.
On top of the new requirements, the EPA will also reallocate 70% of fuel volumes lost to exemptions from 2023 to 2025 to the next two years, recovering more than 2 billion gallons of previously lost demand. Starting in 2028, foreign-made fuels and feedstocks will count for half the renewable compliance value of U.S. products.
"With the 2026--2027 RVOs now in place, the industry is positioned to deliver," Shelby Neal, Darling's vice president of renewables and energy policy, wrote in a blog post Wednesday. "Production is increasing, feedstock supply is expanding and the industry can meet these higher volumes."
UBS reiterated a Buy rating and lifted its price target on Darling stock to $78 from $58. The firm now expects Darling to post earnings of $3.96 a share for 2026, up from a previous estimate of $2.53. That would mark Darling's highest figure since 2023.
Other biofuel producers have also been on the rise to start 2026. Shares of Finnish company Neste Oyj are up 40% in Helsinki trading, while Calumet has climbed 75%.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 02, 2026 12:07 ET (16:07 GMT)
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