Canon Inc. (7751) AI Stock Analysis

• Market Cap: ¥4.59T
• Dividend Yield: 3.27%
• Average Volume (3M): 2.84M
• Price to Earnings (P/E): 26.5
• Beta (1Y): 0.70
• Revenue Growth: 4.02%
• EPS Growth: -41.52%
• Country: JP
• Employees: 111,733
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 71.83
• Shares Outstanding: 1,333,763,400
• 10 Day Avg. Volume: 2,997,670
• 30 Day Avg. Volume: 2,837,936
• PEG Ratio: -0.83
• Price to Book (P/B): 1.48
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 13.49
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥4,966.67
• Price Target Upside: 4.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥4,948.00 ▲(4.23% Upside)

Canon Inc.'s overall stock score is driven primarily by its strong financial performance, characterized by robust revenue growth and a solid balance sheet. However, concerns about cash flow management and mixed technical indicators slightly temper the outlook. The valuation is reasonable, supported by a healthy dividend yield, making the stock appealing for income investors.

Positive Factors

Revenue Growth

The significant revenue growth indicates robust demand for Canon's products and services, enhancing its market presence and competitive position.

Balance Sheet Strength

A strong balance sheet with low leverage provides financial stability and flexibility, enabling Canon to invest in growth opportunities and withstand economic fluctuations.

Product Diversification

Diversification into the medical equipment sector reduces reliance on traditional imaging products, potentially stabilizing revenue and opening new growth avenues.

Negative Factors

Decline in Free Cash Flow

A decline in free cash flow growth can constrain Canon's ability to fund operations and investments, impacting long-term financial health and strategic initiatives.

Gross Profit Margin Pressure

Pressure on gross profit margins could indicate rising costs or pricing challenges, which may affect profitability if not managed effectively.

Increased Debt Levels

Rising debt levels, if not managed carefully, can lead to increased financial risk and limit Canon's ability to invest in future growth opportunities.

Canon Inc. Business Overview & Revenue Model

Company Description

Canon Inc., together with its subsidiaries, manufactures and sells office multifunction devices (MFDs), plain paper copying machines, laser and inkjet printers, cameras, diagnostic equipment, and lithography equipment. The company operates through four segments: Printing Business Unit, Imaging Business Unit, Medical Business Unit, and Industrial and Others Business Unit. The Printing Business Unit segment offers office MFDs, document solutions, laser multifunction printers, laser printers, inkjet printers, image scanners, calculators, digital continuous feed presses, digital sheet-fed presses, and large format printers. The Imaging Business Unit segment provides interchangeable-lens digital cameras, digital compact cameras, interchangeable lenses, compact photo printers, network cameras, video management and video content analytics software, digital camcorders, digital cinema cameras, broadcast equipment, and multimedia projectors. The Medical System Business Unit segment offers computed tomography systems, diagnostic ultrasound systems, diagnostic X-ray systems, magnetic resonance imaging systems, clinical chemistry analyzers, digital radiography systems, and ophthalmic equipment. The Industry and Others Business Unit segment provides semiconductor lithography equipment, flat panel display lithography equipment, vacuum thin-film deposition equipment, organic light-emitting diode display manufacturing equipment, die bonders, handy terminals, and document scanners. The company also provides maintenance services; and supplies replacement drums, parts, toners, and papers. It sells its products under the Canon brand through subsidiaries or independent distributors to dealers and retail outlets, as well as directly to end-users globally. Canon Inc. was founded in 1933 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Canon generates revenue primarily through the sale of imaging and printing products, which include digital cameras, camcorders, and printers. The company has established multiple revenue streams: first, from the sale of hardware such as cameras and printers; second, from consumables like ink and paper used in printing; and third, from service and maintenance contracts associated with its office equipment. Additionally, Canon has a growing presence in the medical equipment sector, providing imaging solutions for healthcare. Strategic partnerships with businesses and organizations in various sectors enhance its market reach and bolster sales. Canon also invests in research and development to innovate and improve its product offerings, which helps maintain its competitive edge and revenue growth.

Canon Inc. Financial Statement Overview

Summary

Canon Inc. exhibits strong revenue growth and profitability, supported by a solid balance sheet with manageable leverage. However, the decline in free cash flow growth is a concern that needs addressing. Overall, the company is in a stable financial position with opportunities for improvement in cash flow management.

Income Statement

Canon Inc. has demonstrated strong revenue growth with a TTM increase of 53.9%, indicating robust demand and market presence. The gross profit margin remains healthy at 47.2%, and the net profit margin is stable at 3.65%. EBIT and EBITDA margins are solid, reflecting efficient operations. However, the slight decline in gross profit margin from the previous year suggests potential cost pressures.

Balance Sheet

The company's balance sheet is strong with a manageable debt-to-equity ratio of 0.35, indicating prudent leverage. Return on equity is moderate at 5.09%, suggesting efficient use of equity capital. The equity ratio is healthy, reflecting a stable financial structure. However, the increase in total debt over the TTM period could be a potential risk if not managed carefully.

Cash Flow

Canon's cash flow performance shows mixed results. The free cash flow growth rate has declined significantly by 75.1% in the TTM, which is a concern. However, the operating cash flow to net income ratio is reasonable at 0.29, indicating decent cash generation relative to profits. The free cash flow to net income ratio of 0.54 suggests that the company is generating adequate cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.58T	4.51T	4.18T	4.03T	3.51T	3.16T
Gross Profit	2.14T	2.14T	1.97T	1.83T	1.63T	1.38T
EBITDA	703.47B	540.37B	631.71B	579.98B	524.60B	358.96B
Net Income	161.03B	160.03B	264.51B	243.96B	214.72B	83.32B
Balance Sheet
Total Assets	6.01T	5.77T	5.42T	5.10T	4.75T	4.63T
Cash, Cash Equivalents and Short-Term Investments	702.99B	506.34B	405.14B	373.01B	404.77B	407.75B
Total Debt	1.21T	663.50B	517.32B	417.41B	320.97B	506.17B
Total Liabilities	2.58T	2.12T	1.81T	1.75T	1.65T	1.84T
Stockholders Equity	3.16T	3.38T	3.35T	3.11T	2.87T	2.58T
Cash Flow
Free Cash Flow	280.18B	369.83B	220.88B	74.08B	273.68B	169.09B
Operating Cash Flow	527.38B	606.83B	451.19B	262.60B	451.03B	333.81B
Investing Cash Flow	-282.57B	-297.32B	-275.37B	-180.82B	-207.26B	-155.44B
Financing Cash Flow	-117.29B	-226.00B	-156.73B	-146.84B	-267.37B	-183.45B

Canon Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4747.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7751, the sentiment is Positive. The current price of 4747 is above the 20-day moving average (MA) of 4653.40, above the 50-day MA of 4532.44, and above the 200-day MA of 4390.86, indicating a bullish trend. The MACD of 61.94 indicates Negative momentum. The RSI at 59.33 is Neutral, neither overbought nor oversold. The STOCH value of 47.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7751.

Canon Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6724	75 Outperform	¥637.25B	12.83	6.07%	3.69%	0.48%	6.92%
7751	73 Outperform	¥4.59T	26.55	―	3.27%	4.02%	-41.52%
6737	69 Neutral	¥91.54B	21.29	―	4.76%	1.81%	9.07%
7739	65 Neutral	¥148.73B	21.52	―	1.92%	7.46%	-8.01%
6727	62 Neutral	¥108.06B	18.82	17.33%	4.10%	-8.93%	48.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6588	55 Neutral	¥153.93B	-22.53	-6.22%	1.61%	-4.91%	-136.94%