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Saputo Inc. is up 1.34 per cent on the TSX Thursday morning after TD Newcrest upgraded the stock to "action list buy" from "buy" and raised the target price to $54 from $52. That's a big premium to the $45.50 stock price, which analyst Michael Van Aeist suggests "could still be conservative," if Saputo improves margins at the same pace as it did last year or makes another meaningful acquisition. He contends the market is underestimating the potential for a substantial profit recovery in the company's U.S. operations and the potential long-term profit growth from its business in Argentina. "Moreover, we see additional upside potential from acquisitions should industry fundamentals not turn around in a hurry." The company reports fiscal first-quarter results at the end of July and Mr. Van Aeist sees the potential for upside surprises from inventory gains in the U.S.

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