Maple Leaf Foods (MFI) AI Stock Analysis

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Maple Leaf Foods

(TSX:MFI)

73Outperform

Maple Leaf Foods presents a stable financial outlook with strong cash flow management and improving profitability. The stock's upward momentum is tempered by overbought technical indicators. Valuation remains a concern due to a high P/E ratio, though a solid dividend yield provides some support. Positive earnings call insights and strategic corporate events contribute to a favorable outlook, positioning the company for growth in 2025.

Maple Leaf Foods (MFI) vs. S&P 500 (SPY)

Market Cap

C$2.94B

Dividend Yield3.79%

Average Volume (3M)249.12K

Price to Earnings (P/E)30.2

Beta (1Y)0.43

Revenue Growth0.89%

EPS GrowthN/A

CountryCA

Employees13,500

SectorConsumer Defensive

Sector Strength86

IndustryPackaged Foods

Share Statistics

EPS (TTM)0.78

Shares Outstanding123,835,050

10 Day Avg. Volume235,338

30 Day Avg. Volume249,119

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.63

Price to Cash Flow (P/CF)4.90

P/FCF Ratio5.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$30.25

Price Target Upside30.50% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Maple Leaf Foods Business Overview & Revenue Model

Company DescriptionMaple Leaf Foods Inc. produces food products in the United States, Canada, Japan, China, and internationally. It produces various food products, including prepared meats, ready-to-cook and ready-to-serve meals, snacks kits, fresh pork and poultry, and plant protein products. The company offers its products under various brands, including Maple Leaf, Schneiders, Greenfield Natural Meat Co., Swift, Prime, Maple Leaf Natural Selections, Mina, Big Stick, Cappola, Deli Express, Field Roast Grain Meat Co., Holiday, Hygrade, Larsen, Lightlife, Lunch Mate, Main Street Deli, Maple Leaf Foodservice, Mitchell's, Olympic Craft Meats, Parma, Shopsy's, Sunrise, and Swift. Maple Leaf Foods Inc. is based in Mississauga, Canada.

How the Company Makes MoneyMaple Leaf Foods generates revenue through the sale of its extensive portfolio of meat and plant-based protein products. The company's revenue streams are primarily derived from its retail and foodservice channels. In the retail sector, Maple Leaf Foods sells its products under various brand names, including Maple Leaf, Lightlife, and Field Roast, to grocery stores and supermarkets across Canada and internationally. The foodservice channel involves supplying products to restaurants, institutions, and other foodservice operators. Maple Leaf Foods also benefits from strategic acquisitions and partnerships that expand its market reach and enhance its product offerings. The company's focus on innovation and sustainability helps drive consumer demand and supports its growth in the competitive food industry.

Maple Leaf Foods Financial Statement Overview

Summary

Maple Leaf Foods shows a solid trajectory in terms of cash flow management and improving profitability. While revenue growth is steady, profitability and margin stability pose challenges. The company maintains a manageable debt level, though there is room for optimizing asset financing.

Income Statement

Positive

Maple Leaf Foods has demonstrated modest revenue growth over the past few years, with a 5.7% increase from 2020 to 2024. However, profitability metrics like EBIT and Net Profit Margin have been volatile, with EBIT dropping to zero in 2024 and fluctuating EBITDA margins. Despite a gross profit margin of approximately 15.9% in 2024, the net income recovery from a significant loss in 2023 indicates potential for financial improvement.

Balance Sheet

Positive

The company's balance sheet shows a moderate debt-to-equity ratio of 1.22 in 2024, suggesting manageable leverage. Stockholders' equity has remained relatively stable, providing a solid equity base. However, the equity ratio of around 34.7% indicates room for improvement in asset financing. The return on equity rebounded to 6.3% in 2024, reflecting improved profitability relative to equity.

Cash Flow

Positive

Cash flow performance has been strong, with operating cash flow reaching CAD 464.9 million in 2024, demonstrating a substantial increase. Free cash flow improved significantly from negative values in previous years to CAD 464.9 million in 2024. The operating cash flow to net income ratio is favorable, indicating effective conversion of earnings to cash. However, the cash flow from financing activities suggests a cautious approach towards external financing.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.90B	4.87B	4.74B	4.52B	4.30B
	Gross Profit
780.01M	451.37M	424.14M	659.08M	703.05M
	EBIT
0.00	6.14M	-23.57M	175.81M	193.95M
	EBITDA
561.19M	273.48M	-8.99M	373.43M	387.62M
	Net Income Common Stockholders
96.60M	-124.98M	-311.89M	102.82M	113.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
175.91M	203.36M	91.08M	162.03M	100.83M
	Total Assets
4.43B	4.60B	4.44B	4.39B	3.86B
	Total Debt
1.88B	2.13B	1.89B	1.43B	986.18M
	Net Debt
1.70B	1.93B	1.80B	1.27B	885.36M
	Total Liabilities
2.89B	3.09B	2.78B	2.35B	1.93B
	Stockholders Equity
1.54B	1.51B	1.66B	2.04B	1.93B
Cash Flow		Free Cash Flow
464.92M	-21.30M	-306.42M	-275.56M	-111.09M
	Operating Cash Flow
464.92M	176.88M	49.32M	304.79M	321.45M
	Investing Cash Flow
-82.54M	-188.57M	-377.01M	-623.48M	-417.43M
	Financing Cash Flow
-409.84M	123.97M	256.74M	379.90M	99.53M

Maple Leaf Foods Technical Analysis

Technical Analysis Sentiment

Negative

Last Price23.18

Price Trends

50DMA

23.59

Negative

100DMA

22.47

Positive

200DMA

22.37

Positive

Market Momentum

MACD

0.46

Positive

RSI

64.06

Neutral

STOCH

62.87

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MFI, the sentiment is Negative. The current price of 23.18 is below the 20-day moving average (MA) of 24.62, below the 50-day MA of 23.59, and above the 200-day MA of 22.37, indicating a neutral trend. The MACD of 0.46 indicates Positive momentum. The RSI at 64.06 is Neutral, neither overbought nor oversold. The STOCH value of 62.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MFI.

Maple Leaf Foods Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMP.A	78 Outperform	C$10.78B	16.38	12.64%	1.70%	1.05%	-6.94%
MFI	73 Outperform	C$2.94B	30.20	6.33%	3.79%	0.89%	―
PBH	68 Neutral	C$3.44B	27.99	6.86%	4.44%	3.35%	28.80%
Sector *	63 Neutral	$20.41B	13.98	-16.01%	3.26%	1.30%	5.01%
SAP	56 Neutral	C$10.46B	42.30	-2.28%	3.02%	9.20%	-147.37%
AGT	45 Neutral		―	-10.69%	―	―	―

* Consumer Defensive Sector Average

Performance Comparison

TSE:MFI

Maple Leaf Foods

23.18

1.35

6.18%

LBLCF

Loblaw Companies

142.01

36.86

35.05%

TSE:EMP.A

Empire Co Cl A NV

46.40

15.01

47.82%

TSE:PBH

Premium Brands

75.06

-6.74

-8.24%

TSE:SAP

Saputo Inc.

25.31

-0.02

-0.08%

TSE:AGT

Applied Graphite Technologies Corporation

0.06

-0.09

-60.00%

Maple Leaf Foods Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 5.32% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance for Maple Leaf Foods, with significant improvements in financial metrics, successful project completions, and a strengthened balance sheet. However, challenges remain with declining plant protein sales and potential tariff impacts. Despite these challenges, the positive aspects of the call outweigh the negatives.

Highlights

Significant Financial Improvement

Maple Leaf Foods reported a 29% increase in adjusted EBITDA to $553 million in 2024, up from $428 million in 2023, representing a 250 basis point improvement in adjusted EBITDA margin to 11.3% for the year.

Strong Q4 Performance

Q4 sales growth accelerated to 4.3% year-over-year with prepared meats growth of 6.5%. Adjusted EBITDA for Q4 rose by 29% to $155 million, with a margin of 12.5%, a 240 basis point improvement from the previous year.

Free Cash Flow and Balance Sheet Strengthening

Free cash flow improved by $296 million to $385 million in 2024. Net debt decreased by $231 million to approximately $1.5 billion, with a net debt to adjusted EBITDA ratio of 2.7 times.

Successful Capital Projects

Completion of major capital projects at London Poultry and the Bacon Centre of Excellence, achieving full business case benefits in Q4.

Dividend Growth

The company increased its annual dividend for the tenth consecutive year, reflecting confidence in its financial health.

Lowlights

Decline in Plant Protein Sales

Plant Protein sales declined by 10.3% in Q4 and 4.3% for the full year, attributed to volume declines in the U.S. refrigerated category.

Potential Tariff Impact

There is uncertainty around potential tariffs on products exported from Canada to the U.S., which could impact approximately 7.5% of total sales.

Company Guidance

During Maple Leaf’s fourth quarter and fiscal year 2024 financial results conference call, significant metrics and guidance were provided. The company reported a consolidated sales growth of 1.1% for the year, driven by a 3.9% increase in their CPG prepared foods business. In Q4 2024, sales growth accelerated to 4.3%, with prepared meats witnessing a 6.5% increase. The company successfully completed major capital projects, leading to full business case benefits in Q4, and saw a 250 basis point improvement in adjusted EBITDA margin to 12.5% for the year. Adjusted EBITDA grew by $125 million or nearly 30%, reaching $553 million in 2024. Free cash flow was $385 million, an improvement of $296 million from 2023, allowing a significant deleverage of the balance sheet with a net debt to adjusted EBITDA of 2.7. The company also announced plans for a tax-free spin-off of Canada Packers. Looking forward to 2025, Maple Leaf expects mid-single digit sales growth and aims to meet or exceed $634 million in adjusted EBITDA, progressing towards a 14% to 16% adjusted EBITDA margin target. The company is also preparing for potential impacts from tariffs on its U.S. exports but maintains that these would not pose an existential threat.

Maple Leaf Foods Corporate Events

Business Operations and StrategyFinancial Disclosures

Maple Leaf Foods Reports Strong 2024 Results, Sets Stage for Transformative 2025

Positive

Feb 25, 2025

Maple Leaf Foods reported a strong financial performance for the fourth quarter and full year of 2024, with a significant increase in Adjusted EBITDA and a reduction in net debt. The company is poised for a transformative year in 2025, with plans to drive sales growth, achieve substantial EBITDA, and complete the spin-off of its pork business, positioning itself for long-term success.

Executive/Board ChangesBusiness Operations and Strategy

Maple Leaf Foods Restructures Leadership for Strategic Growth

Positive

Jan 30, 2025

Maple Leaf Foods announced a strategic reorganization of its executive team and operational structure to enhance its competitive position. The changes include new executive appointments and a streamlined leadership to support the company’s growth initiatives, aiming for operational excellence and cost reduction. These steps are part of the company’s ‘Fuel for Growth’ initiative, which seeks to position Maple Leaf Foods for a transformative year in 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.