Saputo Inc. (SAP) AI Stock Analysis

• Market Cap: C$12.02B
• Dividend Yield: 2.59%
• Average Volume (3M): 564.13K
• Price to Earnings (P/E): 42.3
• Beta (1Y): 0.44
• Revenue Growth: 9.91%
• EPS Growth: -165.83%
• Country: CA
• Employees: 19,600
• Sector: Consumer Defensive
• Sector Strength: 65
• Industry: Packaged Foods
• EPS (TTM): 0.44
• Shares Outstanding: 413,757,800
• 10 Day Avg. Volume: 415,983
• 30 Day Avg. Volume: 564,133
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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$31.50
• Price Target Upside: 7.22% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 70 Neutral
• Price Target: C$32.00 ▲(8.92% Upside)

Saputo Inc. demonstrates solid revenue growth and positive technical momentum, but faces significant profitability challenges and valuation concerns due to negative net income. Strong earnings call highlights and positive corporate events provide a supportive outlook, yet international challenges and softening demand remain risks.

Positive Factors

Consumer Demand

Retail demand for milk and cheese remains stable, indicating consistent consumer interest in Saputo's products.

Profit Margins

The cheese-milk spread was better compared to the previous quarter, signaling improved profitability for Saputo.

Negative Factors

European Market

Slower margin recovery in Europe is impacting overall financial performance.

International Operations

Saputo fell short of expectations, with soft foodservice traffic impacting the USA and Argentina FX dynamics hurting international profit.

Production Costs

Saputo missed cons EBITDA estimates by ~2%, driven by slower-than-anticipated Europe margin recovery and Argentina currency devaluation leading to higher production costs.

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 manufacturing and sale of dairy products, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products, and dairy ingredients. The company's key revenue streams include sales to retail grocery chains, foodservice distributors, and industrial clients who use Saputo's products as ingredients in their own food products. Saputo's earnings are influenced by factors such as global dairy market trends, the availability and cost of raw materials like milk, and consumer demand for dairy products. The company also engages in strategic acquisitions to expand its portfolio and market reach, thereby enhancing its revenue potential.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: 29.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 29.38 is above the 20-day moving average (MA) of 28.57, above the 50-day MA of 27.53, and above the 200-day MA of 25.72, indicating a bullish trend. The MACD of 0.50 indicates Negative momentum. The RSI at 65.43 is Neutral, neither overbought nor oversold. The STOCH value of 82.28 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	71 Outperform	C$3.87B	32.50	5.36%	3.76%	6.29%	24.34%
SAP	70 Neutral	C$12.02B	42.30	-2.51%	2.59%	9.91%	-165.83%
MFI	70 Neutral	C$3.66B	20.41	11.29%	2.88%	5.44%	1391.43%
Sector *	66 Neutral	£7.65B	7.11	6.21%	3.55%	1.45%	25.11%
HLF	64 Neutral	C$482.44M	6.30	14.49%	4.93%	-4.45%	90.27%

Saputo Inc. Corporate Events

Saputo Inc. Reports Strong Q1 Fiscal 2026 Results

Saputo Inc. reported strong financial results for the first quarter of fiscal 2026, with revenues reaching $4.631 billion, a 0.5% increase from the previous year. The company’s adjusted EBITDA rose by 11.2% to $426 million, driven by higher selling prices and operational improvements. Despite unfavorable US dairy market conditions, Saputo achieved significant gains in international markets and maintained robust cash flow, enabling continued investment and shareholder returns.

The most recent analyst rating on (TSE:SAP) stock is a Buy with a C$35.00 price target. To see the full list of analyst forecasts on Saputo Inc. stock, see the TSE:SAP Stock Forecast page.

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.