"Top Recommendations and Analysis on Saputo, Savaria, and Lion Electric: Insights to Drive Stock Prices Up"

2023-05-09 18:52:55

Lion Electric’s backlog grew between March and May. (Picture: courtesy)

What to do with the titles of Saputo, Savaria and Lion Electric? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed by the analysts.

Saputo (SAP, $33.82): RBC slightly raises its one-year target price

Cheese maker Saputo will release its fourth-quarter fiscal 2023 financial results on June 8, and RBC Capital Markets analyst Irene Nattel expects the company to report earnings per share of $0.41. which would constitute a 59% increase over one year.

This forecast is in the center of the expected range of $0.37 to $0.43 from analysts who follow the company.

“Elements that have characterized year-to-date earnings increases will continue to have positive effects in the fourth quarter, particularly price increase initiatives, efficiencies and improved order backlog. », Supports the analyst.

Irene Nattel adds that the difference between the price of milk and cheese, which was negative during the first three quarters of Saputo’s fiscal year, returned to positive territory in the fourth quarter. “Year-to-date the difference was -$0.20 per pound, while in the fourth quarter it was +$0.05 per pound,” she said.

However, this improvement should be offset by the fact that Saputo must sell off its inventories, with blocks of cheese selling for 3% less than a year ago.

RBC analyst forecasts revenue of $4.47 billion (B$) and adjusted earnings before interest, taxes, amortization (EBITDA) of $391 million (M$) for the quarter ended at the end of the month March, while the consensus calls for revenues of $4.42 billion and an adjusted EBITDA of $396.3 million.

According to her, Saputo will achieve average profit margins of 8.7% for the quarter, which is slightly more pessimistic than the consensus, established at 9%.

Irene Nattel argues that Saputo’s performance in the US market will make the biggest difference compared to last year. It maintains that the company’s EBITDA in the United States will jump 247% year on year to $146 million in the fourth quarter, while those of Canadian and international operations will climb 12.1% to $131 million and 16 million respectively. .5% to $72 million. In Europe, EBITDA should gain 7.7% to $42 million.

The analyst reiterates his recommendation of “outperformance” on the title of Saputo, but raises its target price over one year from $1 to $46.