Saputo Inc. (SAP) AI Stock Analysis

• Market Cap: C$11.40B
• Dividend Yield: 2.76%
• Average Volume (3M): 654.96K
• Price to Earnings (P/E): 42.3
• Beta (1Y): 0.46
• Revenue Growth: 9.91%
• EPS Growth: -165.83%
• Country: CA
• Employees: 19,600
• Sector: Consumer Defensive
• Sector Strength: 57
• Industry: Packaged Foods
• EPS (TTM): 0.30
• Shares Outstanding: 413,757,800
• 10 Day Avg. Volume: 699,349
• 30 Day Avg. Volume: 654,963
• PEG Ratio: 6.06
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.82
• 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$30.17
• Price Target Upside: 8.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: C$30.00 ▲(7.64%Upside)

Saputo Inc.'s overall stock score is primarily supported by strong earnings call performance and positive technical indicators. While the stock benefits from revenue growth and strategic initiatives, valuation concerns due to negative earnings and profitability challenges weigh on the score. The company's stable balance sheet and strategic investments provide a foundation for future growth, despite external challenges.

Positive Factors

Commodity Trends

The near-term set-up appears positive with improving conditions in Argentina and better U.S. commodity trends.

Market Positioning

Given sustained category demand, strong free cash flow, and margin expansion opportunities, Saputo remains a more defensive name relative to many peers.

Profit Margins

USA profit margin came in ahead with network investments bearing fruit.

Negative Factors

Financial Expectations

Saputo fell short of expectations, with soft foodservice traffic impacting the USA, Argentina FX dynamics hurting international profit, and a slower margin recovery in Europe.

Margin Recovery

Lingering uncertainty on quarterly cadence of Europe margin recovery.

Market Volatility

The business is fairly impacted by commodity and macro variables across geographies, leading to variability in performance.

Saputo Inc. Business Overview & Revenue Model

Company Description

Saputo Inc. produces, markets, and distributes dairy products in Canada, the United States, Argentina, Australia, and the United Kingdom. The company offers cheeses, including mozzarella and cheddar; specialty cheeses, such as ricotta, provolone, blue, parmesan, goat cheese, feta, romano, and havarti; fine cheeses comprising brie and camembert; and other cheeses that include brick, colby, farmer, munster, monterey jack, fresh curd, and processed cheeses. It also provides fluid milk, yogurt, sour cream, cottage cheese, and ice cream mixes, as well as other dairy and non-dairy products, which comprise butter, cream and creamers, aerosol whipped toppings, whipping cream, dips, spread, oil, flavored coffee whitener, and iced coffee. In addition, the company offers dairy ingredients and nutritional products, including milk powder, casein, whey powder, lactose, lactoferrin, infant formula, and whey protein concentrates; and distributes fine imported cheese to specialty stores, as well as dairy and non-dairy products manufactured by third parties. It serves customers in the retail, foodservice, and industrial segments. The company sells its products under the Saputo, Alexis de Portneuf, Armstrong, Bari, Cogruet, DuVillage 1860, Kingsey, Shepherd Gourmet Dairy, Stella, Woolwich Goat Dairy, Cathedral City, Clover, Country Life, Davidstow, Frylight, Wensleydale Creamery, Vitalite, Sheese, Dairyland, Neilson, Nutrilait, Baxter, Scotsburn, Trutaste, Milk2Go/Lait's Go, Joyya, Baileys, Heluva Good, CHEER, Cracker Barrel, Devondale, Fred Walker, Great Ocean Road, King Island Dairy, Liddells, Mersey Valley, Mil Lel, Murray Goulburn Ingredients, Warrnambool, South Cape, Sungold, Tasmanian Heritage, La Paulina, Molfino, Ricrem, Black Creek, Frigo Cheese Heads, Gardenia, Great Midwest, King's Choice, Lugano, Montchevre, Organic Creamery, Salemville, Treasure Cave, DairyStar, and Friendship Dairies brands. Saputo Inc. was founded in 1954 and is headquartered in Montreal, Canada.

How the Company Makes Money

Saputo Inc. generates revenue primarily through the production and sale of a wide range of dairy products, including cheese, fluid milk, and dairy ingredients. The company operates across multiple segments, including the USA, Canada, International, and Europe, each contributing to its financial performance based on regional market demands and conditions. Key revenue streams include sales to retail markets, foodservice operations, and industrial clients. Saputo capitalizes on its extensive distribution network and brand recognition to maintain a competitive edge. Additionally, strategic acquisitions and partnerships enhance its market presence and contribute to revenue growth by expanding product offerings and geographic reach.

Saputo Inc. Financial Statement Overview

Summary

Saputo Inc. demonstrates solid revenue growth but struggles with profitability and cash generation, as reflected in the negative net income. The balance sheet is stable with moderate leverage, but the company's financial flexibility is constrained by its net debt. While free cash flow improved, ongoing operational inefficiencies and profitability issues pose significant challenges for future growth and financial health.

Income Statement

Saputo Inc. showed a mixed performance in the recent year. Revenue increased to $19.06 billion from $17.34 billion, marking a growth rate of 9.92%. However, the company recorded a net loss of $176 million, indicating significant profitability challenges. Gross profit margin improved to 29.88%, but net profit margin turned negative. The EBITDA margin fell to 3.83%, reflecting operational inefficiencies. Despite revenue growth, profitability remains a concern.

Balance Sheet

Saputo's balance sheet remains relatively strong with a debt-to-equity ratio of 0.52, indicating moderate leverage. Stockholders' equity has increased to $6.98 billion, contributing to an equity ratio of 50.16%, showcasing financial stability. However, the company's net debt position and negative net income raise concerns about future financial flexibility.

Cash Flow

Operating cash flow decreased slightly to $1.10 billion, but free cash flow improved to $681 million, reflecting better capital expenditure management. The operating cash flow to net income ratio is not meaningful due to negative net income. Free cash flow to net income ratio indicates cash generation challenges. Overall, the company exhibits adequate cash flow management, though profitability pressures remain.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	19.06B	17.34B	17.84B	15.04B	14.29B
Gross Profit	5.70B	2.52B	5.42B	4.68B	4.72B
EBITDA	730.00M	1.18B	1.51B	1.08B	1.48B
Net Income	-176.00M	265.00M	622.00M	274.00M	626.00M
Balance Sheet
Total Assets	13.91B	14.26B	14.43B	13.68B	13.12B
Cash, Cash Equivalents and Short-Term Investments	257.00M	466.00M	263.00M	165.00M	308.70M
Total Debt	3.59B	3.99B	4.04B	4.25B	4.11B
Total Liabilities	6.94B	7.21B	7.29B	7.18B	6.68B
Stockholders Equity	6.98B	7.05B	7.14B	6.50B	6.44B
Cash Flow
Free Cash Flow	681.00M	537.00M	384.00M	195.00M	645.10M
Operating Cash Flow	1.10B	1.19B	1.02B	693.00M	1.08B
Investing Cash Flow	-285.00M	-652.00M	-632.00M	-799.00M	-387.40M
Financing Cash Flow	-1.03B	-343.00M	-369.00M	-72.00M	-705.00M

Saputo Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 27.87 is above the 20-day moving average (MA) of 27.08, above the 50-day MA of 26.49, and above the 200-day MA of 25.66, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 61.44 is Neutral, neither overbought nor oversold. The STOCH value of 66.83 is Neutral, 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
HLF	73 Outperform	C$535.91M	7.00	14.49%	3.69%	-4.45%	90.27%
PBH	72 Outperform	C$3.76B	31.61	6.75%	4.06%	6.29%	24.34%
MFI	72 Outperform	C$3.60B	37.95	6.05%	3.31%	3.16%	―
SAP	70 Outperform	C$11.40B	42.30	-2.51%	2.76%	9.91%	-165.83%
Sector *	65 Neutral	$27.02B	15.16	-4.24%	3.17%	1.01%	1.94%

Saputo Inc. Corporate Events

Saputo Inc. Reports Stable Fiscal 2025 Results Amidst Challenges

Saputo Inc. reported its fiscal 2025 results, highlighting stable performance amidst challenging conditions. The company achieved year-over-year growth in adjusted EBITDA and revenues in Canada, USA, and Europe, despite facing issues like the unfavorable milk-cheese spread in the USA and currency devaluation in Argentina. Saputo’s strategic investments in focus brands and infrastructure are expected to support future growth, while restructuring efforts and share buybacks reflect ongoing optimization and shareholder value enhancement.

The most recent analyst rating on (TSE:SAP) stock is a Buy with a C$37.00 price target. To see the full list of analyst forecasts on Saputo Inc. stock, see the TSE:SAP Stock Forecast page.