Why Canon (CAJ) Stock Is Lower Today

NEW YORK (TheStreet) -- Canon  (CAJ) Chairman and CEO Fujio Mitarai, whose company is faced with a shrinking market for digital cameras, will now seek acquisitions over the next five years in operations targeting business instead of consumers, the Nikkei reports.

Shares of Canon are down -0.21% to $33.01.

 

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 several positive factors, 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. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of 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 ($2.05 versus $1.91).
  • You can view the full analysis from the report here: CAJ Ratings Report

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