Saputo Inc. (SAP) AI Stock Analysis

• Market Cap: C$16.89B
• Dividend Yield: 1.89%
• Average Volume (3M): 853.24K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.48
• Revenue Growth: 5.37%
• EPS Growth: -135.85%
• Country: CA
• Employees: 19,600
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.48
• Shares Outstanding: 410,165,560
• 10 Day Avg. Volume: 768,057
• 30 Day Avg. Volume: 853,235
• PEG Ratio: 0.36
• Price to Book (P/B): 1.51
• Price to Sales (P/S): 0.55
• P/FCF Ratio: 15.44
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$39.80
• Price Target Upside: -4.23% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: C$45.00 ▲(8.28% Upside)

Saputo Inc. has a solid financial foundation with strong cash flow and revenue growth, but profitability issues weigh on the score. Technical indicators show strong momentum, though valuation concerns persist due to negative earnings. Positive earnings call guidance and sentiment provide a boost.

Positive Factors

Strong Cash Flow Generation

The significant increase in cash flow enhances Saputo's financial flexibility, enabling strategic investments and debt reduction, which supports long-term growth.

Improved Financial Metrics

The improvement in financial metrics indicates effective cost management and operational efficiency, strengthening Saputo's competitive position and profitability.

Growth in Canadian Segment

Revenue growth in Canada demonstrates Saputo's ability to adapt to inflationary pressures and maintain market leadership, supporting long-term revenue stability.

Negative Factors

Profitability Challenges

Ongoing profitability issues may hinder Saputo's ability to reinvest in growth and compete effectively, impacting long-term financial health.

Challenges in Australia

Operational challenges in Australia could affect Saputo's ability to maintain efficiency and profitability in this key market, impacting global operations.

U.S. Revenue Decline

Revenue decline in the U.S. market may signal competitive pressures and market volatility, potentially affecting Saputo's overall revenue growth trajectory.

Saputo Inc. Business Overview & Revenue Model

Company Description

Saputo Inc. is a leading Canadian dairy processor, operating in the sectors of dairy products, cheese, and other food products. Founded in 1954, the company has expanded its operations globally and is known for its high-quality cheese, fluid milk, and dairy ingredients. Saputo's core products include a wide range of cheese varieties, milk products, and cream, catering to both retail and foodservice customers. The company operates across North America, Europe, and Australia, making it one of the largest dairy processors in the world.

How the Company Makes Money

Saputo Inc. generates revenue primarily through the sale of dairy products, which include cheese, fluid milk, and dairy ingredients. The company operates through various segments, including the Dairy Products Division (Canada), the Dairy Products Division (USA), the Cheese Division (Canada and USA), and the International Sector. Key revenue streams come from retail sales, foodservice sales, and industrial sales. Significant partnerships with retailers and foodservice operators contribute to consistent demand for its products. Additionally, Saputo benefits from economies of scale due to its extensive production capabilities and distribution networks, enhancing its profitability. The company also engages in strategic acquisitions to expand its product offerings and market presence, further driving revenue growth.

Saputo Inc. Financial Statement Overview

Summary

Saputo Inc. shows strong revenue growth and effective cash flow management, which are positive indicators. However, the negative net income and declining profitability margins are significant concerns. The balance sheet shows stable leverage, but the negative return on equity highlights challenges in generating shareholder value.

Income Statement

Saputo Inc. has shown a mixed performance in its income statement. The company experienced a significant revenue growth rate of 13.1% in the TTM period, indicating strong top-line growth. However, the net profit margin is negative at -0.92%, reflecting a net loss, which is a concern. The gross profit margin has decreased from previous years, and both EBIT and EBITDA margins have declined, suggesting pressure on profitability. Overall, while revenue growth is a positive sign, the declining profitability metrics and net loss weigh heavily on the score.

Balance Sheet

The balance sheet of Saputo Inc. shows moderate financial stability. The debt-to-equity ratio stands at 0.52, indicating a manageable level of leverage. However, the return on equity is negative at -2.46%, which is concerning as it reflects the company's inability to generate positive returns for shareholders. The equity ratio is relatively stable, suggesting a balanced capital structure. While the leverage is under control, the negative ROE impacts the overall score.

Cash Flow

Saputo Inc.'s cash flow statement presents a mixed picture. The free cash flow growth rate is strong at 23.35%, indicating improved cash generation. The operating cash flow to net income ratio is 0.34, showing that the company is generating cash from operations despite the net loss. The free cash flow to net income ratio is 0.62, suggesting that the company is managing its cash flow effectively. The positive cash flow metrics provide a cushion against the net loss, resulting in a relatively favorable score.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.10B	19.06B	17.34B	17.84B	15.04B	14.29B
Gross Profit	1.96B	1.56B	1.51B	1.55B	1.16B	1.47B
EBITDA	1.54B	1.43B	1.37B	1.42B	1.02B	1.37B
Net Income	-94.00M	-176.00M	265.00M	622.00M	274.00M	626.00M
Balance Sheet
Total Assets	13.48B	13.91B	14.26B	14.43B	13.68B	13.12B
Cash, Cash Equivalents and Short-Term Investments	296.00M	257.00M	466.00M	263.00M	165.00M	308.70M
Total Debt	3.44B	3.59B	3.99B	4.04B	4.25B	4.11B
Total Liabilities	6.68B	6.94B	7.21B	7.29B	7.18B	6.68B
Stockholders Equity	6.79B	6.98B	7.05B	7.14B	6.50B	6.44B
Cash Flow
Free Cash Flow	1.06B	681.00M	537.00M	384.00M	195.00M	645.10M
Operating Cash Flow	1.43B	1.10B	1.19B	1.02B	693.00M	1.08B
Investing Cash Flow	-321.00M	-285.00M	-652.00M	-632.00M	-799.00M	-387.40M
Financing Cash Flow	-1.27B	-1.03B	-343.00M	-369.00M	-72.00M	-704.70M

Saputo Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SAP, the sentiment is Positive. The current price of 41.56 is above the 20-day moving average (MA) of 39.83, above the 50-day MA of 37.02, and above the 200-day MA of 30.46, indicating a bullish trend. The MACD of 1.20 indicates Negative momentum. The RSI at 73.63 is Negative, neither overbought nor oversold. The STOCH value of 85.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SAP.

Saputo Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PBH	69 Neutral	C$4.53B	68.14	3.86%	3.37%	13.05%	-33.72%
SAP	66 Neutral	C$16.89B	-206.78	-1.32%	1.89%	5.37%	-135.85%
MFI	64 Neutral	C$3.08B	14.97	11.72%	5.04%	-0.03%	497.79%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
HLF	58 Neutral	C$405.86M	8.74	8.60%	4.84%	6.15%	-36.76%

Saputo Inc. Corporate Events

Saputo Inc. Achieves Strong Q2 Fiscal 2026 Results with Strategic Initiatives

Saputo Inc. reported strong financial results for the second quarter of fiscal 2026, with revenues reaching $4.721 billion, a slight increase from the previous year. The company’s adjusted EBITDA rose significantly by 15.7% to $450 million, driven by successful commercial initiatives, operational improvements, and cost optimization measures. Despite unfavorable US dairy commodity market conditions, Saputo managed to increase sales volumes and maintain margins through strategic pricing and efficiency efforts. Net earnings also saw a substantial rise, attributed to higher adjusted EBITDA, gains from hyperinflation adjustments, and reduced financial charges.