On Friday, BMO Capital Markets updated its outlook on Saputo (SAP:CN) (OTC: SAPIF), reducing the price target from the previous C$30.00 to C$27.00. Despite the adjustment in price target, the firm maintained a Market Perform rating on the stock.
The analyst at BMO Capital, Tamy Chen, revised the earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates for the company's operations in the U.S. and internationally for the third fiscal quarter of 2025.
The adjusted earnings per share (EPS) forecast now stands at $0.38, down from the prior estimate of $0.41, which is slightly below the consensus of $0.42. This revision comes ahead of Saputo's financial report, which is scheduled to be released on February 6 after market close.
The new price target of C$27.00 is based on a target multiple of 7.5 times the firm's forecasted 2026 EBITDA, which is a decrease from the previous multiple of approximately 8.5 times.
The analyst expressed surprise at the stock's recent performance, noting a decline since December. Saputo shares are currently trading at 7 times BMO's projected 2026 EBITDA, a level the analyst considers to be "a bit too punitive." Given this assessment, the analyst suggests there could be potential for some near-term upside in the stock price.
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