Saputo Inc. (TSE:SAP) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The results don't look great, especially considering that the analysts had been forecasting a profit and Saputo delivered a statutory loss of CA$1.22 per share. Revenues of CA$5.0b did beat expectations by 4.6% though. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Saputo TSX:SAP Earnings and Revenue Growth February 9th 2025

Taking into account the latest results, the current consensus from Saputo's nine analysts is for revenues of CA$19.4b in 2026. This would reflect a reasonable 2.8% increase on its revenue over the past 12 months. Saputo is also expected to turn profitable, with statutory earnings of CA$1.83 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$19.2b and earnings per share (EPS) of CA$1.99 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at CA$30.55, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Saputo, with the most bullish analyst valuing it at CA$37.00 and the most bearish at CA$25.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Saputo's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Saputo's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 5.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Saputo.

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The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Saputo's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Saputo analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Saputo has  2 warning signs  we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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