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Saputo Inc. (TSE:SAP)
TSX:SAP
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Saputo Inc. (SAP) AI Stock Analysis

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TSE:SAP

Saputo Inc.

(TSX:SAP)

Rating:63Neutral
Price Target:
C$35.00
â–²(2.34% Upside)
Saputo Inc.'s overall stock score is driven by strong technical indicators and positive earnings call highlights, despite concerns over valuation and financial performance. The company's robust revenue growth and cash flow management are offset by negative net income and profitability challenges.
Positive Factors
Financial Performance
SAP CN reported fiscal Q1 results, beating on EBITDA and EPS despite a topline miss, highlighting its potential as spread dynamics improve.
Market Demand
Positive retail demand and elimination of duplicate operating costs could lead to top and bottom line growth ahead of peers.
Operational Efficiency
A cost savings plan is in place, showing potential for enhanced margins and free cash flow in the future.
Negative Factors
European Market
Slower margin recovery in Europe is impacting overall financial performance.
Market Volatility
The business is fairly impacted by commodity and macro variables across geographies, leading to variability in performance.
Regional Performance
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.

Saputo Inc. (SAP) vs. iShares MSCI Canada ETF (EWC)

Saputo Inc. Business Overview & Revenue Model

Company DescriptionSaputo 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 MoneySaputo 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. Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
Saputo's earnings call highlighted a strong start to fiscal 2026 with record adjusted EBITDA and robust revenue growth in key markets like Canada and the U.S. The company also demonstrated successful cost management and product innovation. However, challenges in the international sector, particularly with reduced milk availability in Australia and higher costs in Argentina, tempered the positive outlook.
Q1-2026 Updates
Positive Updates
Record First Quarter Adjusted EBITDA
Saputo reported a record first quarter adjusted EBITDA of $426 million, which was 11% higher compared to last year.
Solid Revenue Growth
Consolidated revenues increased to $4.6 billion, a 1% increase compared to last year, driven by higher selling prices and sales volume.
Strong Performance in Canada and U.S.
Canada and U.S. operations delivered meaningful improvements. Canada saw a 5% revenue increase, while U.S. revenues increased by 2%.
Improved Cash Flow and Shareholder Returns
Cash flow from operating activities was robust at $317 million, up 66% year-over-year. The company returned $202 million to shareholders through dividends and share repurchases.
SG&A Cost Efficiency
The company achieved significant SG&A cost efficiency due to cost optimization measures across various sectors.
Successful Product Innovation
Saputo introduced new products like Saputo's spicy mozzarella and expanded its Cheese Heads brand with successful launches.
Negative Updates
Challenges in International Sector
Revenue in the international sector fell by 14% compared to last year due to lower sales volume and unfavorable conditions in Australia.
Higher Milk Costs in Argentina
In Argentina, higher milk costs affected results, although the company managed to mitigate some impacts through favorable alignments.
Reduced Milk Availability in Australia
Milk availability in Australia was reduced due to ongoing drought conditions, impacting efficiency and fixed cost absorption.
Company Guidance
During the Saputo First Quarter 2026 Financial Results Call, the company provided guidance on various financial metrics, reflecting a strong start to the fiscal year. Consolidated revenues reached $4.6 billion, marking a 1% increase from last year, driven by higher selling prices and robust sales volumes, despite some commodity market challenges. The adjusted EBITDA was reported at $426 million, an 11% increase year-over-year, while net earnings totaled $165 million, with adjusted net earnings at $184 million, up 10%. Adjusted EPS grew by 13% to $0.44 per share, bolstered by share repurchases under the NCIB program. Operating cash flow surged by 66% to $317 million, supported by improved EBITDA and efficient working capital management. Capital expenditures amounted to $65 million, aligning with strategic investment plans. The company also improved its net debt to adjusted EBITDA ratio to 2.03, highlighting strong financial health. Looking forward, Saputo remains focused on sustainable growth, enhancing shareholder value, and expanding EPS through strategic commercial execution, cost discipline, and portfolio optimization, while continuing to invest in innovation and customer engagement.

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
65
Positive
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
72
Positive
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
68
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue19.06B17.34B17.84B15.04B14.29B
Gross Profit5.70B2.52B5.42B4.68B4.72B
EBITDA730.00M1.18B1.51B1.08B1.48B
Net Income-176.00M265.00M622.00M274.00M626.00M
Balance Sheet
Total Assets13.91B14.26B14.43B13.68B13.12B
Cash, Cash Equivalents and Short-Term Investments257.00M466.00M263.00M165.00M308.70M
Total Debt3.59B3.99B4.04B4.25B4.11B
Total Liabilities6.94B7.21B7.29B7.18B6.68B
Stockholders Equity6.98B7.05B7.14B6.50B6.44B
Cash Flow
Free Cash Flow681.00M537.00M384.00M195.00M645.10M
Operating Cash Flow1.10B1.19B1.02B693.00M1.08B
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 Price34.20
Price Trends
50DMA
29.41
Positive
100DMA
27.67
Positive
200DMA
26.20
Positive
Market Momentum
MACD
1.44
Negative
RSI
81.64
Negative
STOCH
82.17
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 34.2 is above the 20-day moving average (MA) of 31.95, above the 50-day MA of 29.41, and above the 200-day MA of 26.20, indicating a bullish trend. The MACD of 1.44 indicates Negative momentum. The RSI at 81.64 is Negative, neither overbought nor oversold. The STOCH value of 82.17 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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
C$4.25B45.575.36%3.58%8.42%-17.99%
72
Outperform
C$4.42B24.6711.29%2.57%5.44%1391.43%
63
Neutral
C$13.98B42.30-2.20%2.22%7.58%-155.93%
63
Neutral
$20.46B14.47-3.60%3.13%2.63%-6.18%
61
Neutral
C$468.20M7.3012.01%5.18%1.05%13.40%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:SAP
Saputo Inc.
34.20
5.02
17.20%
TSE:HLF
High Liner Foods
16.21
3.23
24.88%
TSE:MFI
Maple Leaf Foods
35.81
14.27
66.25%
TSE:PBH
Premium Brands
95.05
12.09
14.57%

Saputo Inc. Corporate Events

Executive/Board ChangesShareholder Meetings
Saputo Inc. Announces Successful Election of Directors
Positive
Aug 8, 2025

Saputo Inc. announced the election of its board of directors at the annual shareholders’ meeting held on August 8, 2025. All ten nominees proposed by the board were successfully elected, with high approval rates, indicating strong shareholder support. This election is significant for Saputo as it reinforces the company’s governance structure and may impact its strategic direction and stakeholder confidence.

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.

Business Operations and StrategyFinancial Disclosures
Saputo Inc. Reports Strong Q1 Fiscal 2026 Results
Positive
Aug 7, 2025

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.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Saputo Inc. Reports Stable Fiscal 2025 Results Amidst Challenges
Positive
Jun 5, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 20, 2025