Saputo Inc. Just Missed Earnings; Here's What Analysts Are Forecasting Now

As an investor, you're always on the lookout for companies that can deliver consistent performance and growth. Saputo Inc. (TSX: SAP), a leading global dairy processor, has been a favorite among investors for its strong financial performance and dividend growth. However, the company recently missed earnings estimates, raising questions about its future prospects. Let's dive into the recent earnings report and see what analysts are forecasting for Saputo Inc.



Q3 FY25 Earnings Recap

Saputo Inc. reported its third-quarter fiscal 2025 results on February 6, 2025. The company missed earnings estimates, reporting a net loss of CAD 518 million compared to the expected CAD 167 million. Adjusted EBITDA also came in below expectations, at CAD 417 million compared to the estimated CAD 494 million. The company attributed the miss to market volatility, inflation, and a non-cash goodwill impairment charge of CAD 674 million related to its UK division.

Analyst Ratings and Price Targets

Despite the earnings miss, analysts remain largely optimistic about Saputo Inc.'s prospects. As of February 2025, six analysts have given stock ratings to Saputo Inc. in the past three months, with an average price target of C$32.83, representing a 37.88% upside from the last price of C$23.81. The highest price target is C$37.00, and the lowest is C$27.00.



Key Factors Driving Saputo Inc.'s Performance

Several factors contribute to Saputo Inc.'s recent performance and future prospects:

1. Market Volatility and Inflation: Saputo Inc. operates in a dynamic macroeconomic environment characterized by volatile commodity markets and inflation. Despite these challenges, the company has managed to deliver strong operating cash flow and solid financial performance.
2. Operational Improvements and Cost Containment: Saputo Inc. has been focusing on managing factors within its control, such as operational improvements and cost containment measures. These initiatives have contributed to the company's strong performance and are expected to continue enhancing its ability to service customers, particularly in the USA Sector.
3. Capital Projects and Investments: The company is making tangible progress with its Global Strategic Plan, with capital projects advancing and actions and initiatives completed to date. These investments are expected to drive additional capacity and capabilities, cost containment, and efficiency initiatives, new product innovations, and investments in brands and advertising.
4. Dividend and Share Repurchases: Saputo Inc. has increased its dividend and the number of common shares that may be purchased under its normal course issuer bid (NCIB). The company purchased approximately 1.2 million common shares for a total purchase price of approximately $32 million during the third quarter of fiscal 2025. These actions demonstrate the company's confidence in its financial position and future prospects.



Conclusion

Saputo Inc. missed earnings estimates in the third quarter of fiscal 2025, but analysts remain largely optimistic about the company's prospects. The company's focus on operational improvements, cost containment, capital projects, and geographical diversification, along with positive analyst sentiment, bodes well for its future prospects. As an investor, it's essential to stay informed about the key factors driving Saputo Inc.'s performance and incorporate them into your investment decisions. Keep an eye on the company's earnings reports and analyst forecasts to make informed decisions about your investment portfolio.