NEW YORK (TheStreet) -- Shares of Canon Inc. (CAJ) are up 2.14% to $31.99 after the camera manufacturer company said today it will acquire up to 1.5% of its outstanding shares for a maximum of $492 million to improve capital efficiency.
The company said it will buy back up to 17 million shares between May 9 and July 29.
TheStreet Ratings team rates CANON INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CANON INC (CAJ) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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. To add to this, CAJ has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for CANON INC is rather high; currently it is at 53.94%. 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 6.22% significantly trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Computers & Peripherals industry and the overall market, CANON INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- CAJ has underperformed the S&P 500 Index, declining 10.34% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: CAJ Ratings Report