Read original blog entry
Canon Inc. (CAJ) is one of the world's leading makers of office equipment, cameras, and optical products. The company's first nine-month results were hurt by the economic slowdown in the developed countries triggered by a financial crisis, a strong yen appreciation, and weak consumer spending. Moreover, the company reduced its guidance for the full year 2008.
We lower our estimates for fiscal 2009 due to the macro economic environment. However, in the light of new product launches scheduled for the remainder of 2008 as well as its cost reduction efforts, we maintain a Hold rating on CAJ shares and slightly raise our six-month price target to $30.
Shares of Canon are currently trading at a P/E multiple of 12.3x our estimate for the next four quarter earnings per share, which is at a discount to the peer group mean. The stock is also trading at 12.3x our reduced 2009 EPADR of $2.36, a discount to the industry mean and S&P 500. Although we believe that some premium is warranted given its strong position in the digital camera business, we don't see room for meaningful appreciation from current levels.
Priyanka Poddar contributed to the report.
Read the full analyst report on CAJ
Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Equity Research. See all todays Analyst Blog entries on Zacks.com.