NEW YORK (TheStreet) -- Shares of Canon Inc. (CAJ) - Get Canon Inc. Sponsored ADR Report are creeping higher by 0.26% to $30.43 today after the world's largest camera maker raised its forecasts for its full year net income, citing a weaker than expected yen, Bloomberg reports.
The Tokyo-based company said in a statement that it now expects to post a net income of 250 billion yen, or $2.3 billion, this year, up from its previous forecast of 240 billion yen.
Canon most heavily relies on its sales of office equipment as well as its partnership with Hewlett-Packard Co. (HPQ) - Get HP Inc. (HPQ) Report to battle through a slump in the camera business, Bloomberg added.
Overseas earnings is also being boosted by a 2.5% weakening in the yen this year as Japanese Prime Minister Shinzo Abe continues his efforts at spurring inflation, Bloomberg noted.
Separately, TheStreet Ratings team rates CANON INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CANON INC (CAJ) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Computers & Peripherals industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $648.14 million to $806.02 million.
- CAJ's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- The gross profit margin for CANON INC is rather high; currently it is at 58.85%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CAJ's net profit margin of 8.67% significantly trails the industry average.
- CANON INC has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CANON INC reported lower earnings of $1.91 versus $2.21 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.91).
- You can view the full analysis from the report here: CAJ Ratings Report