Saputo Inc. (SAP) AI Stock Analysis

• Market Cap: C$11.09B
• Dividend Yield: 2.85%
• Average Volume (3M): 509.93K
• Price to Earnings (P/E): 42.3
• Beta (1Y): 0.46
• Revenue Growth: 9.20%
• EPS Growth: -147.37%
• Country: CA
• Employees: 19,600
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Packaged Foods
• EPS (TTM): 0.30
• Shares Outstanding: 415,876,280
• 10 Day Avg. Volume: 664,385
• 30 Day Avg. Volume: 509,932
• PEG Ratio: 0.19
• Price to Book (P/B): 2.05
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 38.12
• 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$30.86
• Price Target Upside: 15.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 60 Neutral
• Price Target: ―

Saputo Inc.'s stock score reflects challenges with profitability and a significant impairment charge, offset by strong cash flow management and strategic initiatives like share repurchases. Technical indicators suggest positive momentum, but valuation concerns persist due to negative earnings. The mixed results from the earnings call highlight uncertainties ahead, emphasizing the need for operational improvements and market condition adaptations.

Positive Factors

Cash Flow

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

Earnings

USA profit margin was better than expected due to successful network investments.

Growth Potential

Positive retail demand and elimination of duplicate operating costs suggest potential growth.

Negative Factors

Currency Impact

Saputo fell short of expectations due to soft foodservice traffic in the USA and foreign exchange issues in Argentina.

Margin Recovery

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.

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. faces challenges with declining profitability and negative net income TTM. However, it maintains a stable balance sheet with moderate leverage and a healthy equity ratio. Positive cash flow management indicates resilience in operational cash generation. Strategic improvements in operational efficiency and cost management could enhance overall financial health.

Income Statement

Saputo Inc. has shown fluctuating revenue growth with a recent decline in net income leading to negative net profit margins of -0.84% TTM (Trailing-Twelve-Months). Gross profit margin is stable at 16.32% TTM, but the decline in profitability metrics such as EBIT and EBITDA margins suggests operational challenges. The company has seen a decline in revenue growth rate recently, which could indicate market pressures or internal inefficiencies.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.52, indicating balanced leverage. Return on equity has declined to -2.26% TTM, reflecting recent net losses. However, the equity ratio of 50.48% TTM indicates a fair proportion of financing through equity, suggesting reasonable financial stability despite recent downturns.

Cash Flow

Saputo's cash flow statement reveals a positive free cash flow, with a growth rate of 17.69% TTM, indicating effective cash management despite operating challenges. The operating cash flow to net income ratio is strong at -7.00 TTM, highlighting operational efficiency. However, the free cash flow to net income ratio shows some strain, suggesting potential areas for improvement in profitability conversion.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
18.85B	17.34B	17.84B	15.04B	14.29B	14.94B
	Gross Profit
3.08B	2.52B	5.42B	4.68B	4.72B	4.76B
	EBIT
1.20B	853.00M	976.00M	597.00M	964.00M	1.01B
	EBITDA
800.00M	1.18B	1.51B	1.08B	1.48B	1.42B
	Net Income Common Stockholders
-158.00M	265.00M	622.00M	274.00M	626.00M	582.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
330.00M	466.00M	263.00M	165.00M	308.70M	319.40M
	Total Assets
13.87B	14.26B	14.43B	13.68B	13.12B	13.79B
	Total Debt
3.62B	3.99B	4.04B	4.25B	4.11B	4.49B
	Net Debt
3.29B	3.52B	3.78B	4.08B	3.81B	4.17B
	Total Liabilities
6.87B	7.21B	7.29B	7.18B	6.68B	7.23B
	Stockholders Equity
7.00B	7.05B	7.14B	6.50B	6.44B	6.56B
Cash Flow		Free Cash Flow
632.00M	537.00M	384.00M	195.00M	645.10M	460.60M
	Operating Cash Flow
1.11B	1.19B	1.02B	693.00M	1.08B	1.04B
	Investing Cash Flow
-375.00M	-652.00M	-632.00M	-799.00M	-387.40M	-2.49B
	Financing Cash Flow
-833.00M	-343.00M	-369.00M	-72.00M	-705.00M	1.64B

Saputo Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 26.66 is above the 20-day moving average (MA) of 26.46, above the 50-day MA of 26.02, and above the 200-day MA of 25.78, indicating a bullish trend. The MACD of 0.21 indicates Positive momentum. The RSI at 54.33 is Neutral, neither overbought nor oversold. The STOCH value of 62.29 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	78 Outperform	C$536.76M	7.01	14.49%	5.04%	-4.45%	90.27%
MFI	72 Outperform	C$3.46B	36.47	6.05%	3.44%	3.16%	―
PBH	68 Neutral	C$3.58B	30.09	6.75%	4.26%	6.29%	24.34%
Sector *	65 Neutral	$8.76B	15.22	4.69%	4.58%	3.64%	-2.90%
SAP	60 Neutral	C$11.09B	42.30	-2.51%	2.85%	9.20%	-147.37%

Saputo Inc. Corporate Events

Saputo Inc. Sees Strong Q3 Performance Despite UK Challenges

Saputo Inc. reported strong financial results for the third quarter of fiscal 2025, with a 13% year-over-year increase in adjusted EBITDA, reflecting successful strategic execution and cost control. Despite a net loss primarily due to a significant goodwill impairment charge in its UK Dairy Division, Saputo demonstrated robust revenue growth across all sectors, enhanced by operational improvements and strategic capital allocations, including an increased share buyback program.