JPMorgan analyst Thomas Palmer upgraded Darling Ingredients to Overweight from Neutral and raised his price target for the shares to $25 from $21. The analyst continues to view the company's Diamond Green Diesel joint venture as the key driver of the stock. With the recently expanded joint venture facility now running at full capacity and Low Carbon Fuel Standards credits trading at "historically favorable levels," Darling's earnings should "inflect positively" starting in Q4 of 2018, Palmer tells investors in a research note. The analyst also thinks it is increasingly likely that the Blenders Tax Credit is approved for 2018 and 2019, which he estimates could provide nearly $1.50 per share to Darling. He sees a favorable near-term earnings setup for the stock.

Reports Q1 revenue $1.4B, consensus $1.48B. "For several years, we have enjoyed tailwinds from a demand-driven global economy and strong global commodity and specialty ingredient prices. We are now adapting to the new reality of abundant global supplies. This is a cycle we have seen many times, and we are making the necessary adjustments in our procurement process and lowering our operating costs where feasible to gain back our margin leverage," said Randall C. Stuewe, Darling Ingredients chairman and CEO. "Globally we are seeing very nice progress and improvement in April for our core specialty ingredient business, and DGD has finally worked through its higher-priced feedstock pipeline. We anticipate an improved performance for the rest of the year."