Saputo: Near-Term Margin Pressure and Full Valuation Justify Hold Rating

Analyst Etienne Ricard of BMO Capital maintained a Hold rating on Saputo Inc., retaining the price target of C$42.00.

Etienne Ricard has given his Hold rating due to a combination of factors tied to Saputo’s near‑term earnings pressure and valuation. He anticipates the company’s margins will slip sequentially for the first time in a year, as higher stock‑based compensation, stepped‑up advertising and promotions in both the U.S. and Canada, and less favourable dairy commodity dynamics weigh on profitability.

At the same time, he views the current share price as largely fair, noting that the stock already trades at the upper end of its historical earnings multiple range, which limits upside. The planned sale of most of the Argentina business should bring in meaningful cash but temporarily dampens earnings until that capital is redeployed, reinforcing a balanced risk‑reward profile that supports maintaining a Hold rather than moving to a more decisive rating.

In another report released on April 12, National Bank also downgraded the stock to a Hold with a C$46.00 price target.

SAP’s price has also changed moderately for the past six months – from C$33.460 to C$39.850, which is a 19.10% increase.