On Monday, BMO Capital Markets showed confidence in Saputo Inc. (SAP:CN) (OTC: SAPIF) shares, as the firm raised its price target to C$35.00 from C$34.00, while maintaining an Outperform rating. The adjustment comes in response to Saputo's positive fourth-quarter fiscal year 2024 results and the fiscal year 2025 outlook.
The company's strategic performance plan (GSP) is cited as a significant factor for the optimistic forecast. According to BMO Capital, the GSP is expected to start yielding benefits for Saputo.
The analyst noted that in fiscal year 2025, capital expenditures (capex) are anticipated to decrease substantially. This reduction in spending, alongside continued improvements in underlying operations, is projected to lead to stronger cash flows for the company.
The maintained Outperform rating reflects BMO Capital's expectation that Saputo will continue to perform well above the average for its sector. The firm's confidence in the company is further underscored by the unchanged target multiple of 8.5 times the revised fiscal year 2026 estimated EBITDA (earnings before interest, taxes, depreciation, and amortization).
Saputo's financial outlook, as discussed by BMO Capital, suggests that the company is on a path to enhanced financial performance. This is attributed to the expected decline in capital expenditures and the continuous improvement of its operations. The price target increase represents a modest yet positive adjustment, signaling a belief in the company's potential for growth and value creation.
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