Well-Positioned for Margin Expansion in Fiscal 2027

Research evidence excerpt

Well-Positioned for Margin Expansion in Fiscal 2027

rt for the EPS $1.82 $2.12↓ $2.49↓

Armstrong, Cathedral City, Frigo Cheese Heads, Saputo brands). Return on 10.6% 13.0%↑ 15.1%↑

Guiding for $515M in capital expenditures in fiscal 2027 (fiscal 2026: $339M; prior Capital

five-year average: $510M) with the increase attributable to improving capacity and Consensus Estimates

efficiency in high demand product areas" (e.g., cottage cheese, value-added beverages,

2026A 2027E 2028E

ingredients).

EPS $2.20 $2.49

Opening the door to M&A. Incrementally new, the outlook notes the potential for

Valuationdisciplined M&A aligned with strategic priorities: "we're looking for things that will

allow us to keep growing in the protein sector, tailored nutrition; the criteria is it 2026A 2027E 2028E

must meet things like adding capabilities." On the call, management did not dismiss P/E 23.4x 20.1x 17.2x

potential for large M&A ("it's not about the size; there are a number of things that we EV/EBITDA 12.2x 10.6x 9.9x

require that could be tuck in size or something that's more substantial"). Leverage- QTR. EPS Q1 Q2 Q3 Q4

wise, Saputo's net-debt-to-adjusted-EBITDA (pro forma Argentina divestiture) stands at

2026A $0.42 $0.44 $0.54 $0.41

1.4x; we note Saputo has been comfortable operating at ~2x leverage in the past.

2027E $0.46 $0.55 $0.63 $0.49

Target price unchanged at $42. Our target price is based on a 17x F2028 earnings

multiple. Over the past five years, SAP has traded at an average 16x earnings multiple

(range: 12-21x), representing 112% of the S&P/TSX index (range: 77-166%).

Key Changes

Estimates Q1 / 27E 2027E 2028E

Revenue $4,365 $18,124 $18,570

Previous $4,493 $18,405 $18,856 Our Thesis

EBITDA $429 $1,853 $1,986 Saputo demonstrated another quarter of operational