Canon Inc. (7751) AI Stock Analysis

• Market Cap: ¥4.30T
• Dividend Yield: 3.52%
• Average Volume (3M): 2.86M
• Price to Earnings (P/E): 24.9
• Beta (1Y): 0.68
• Revenue Growth: 4.76%
• EPS Growth: -39.64%
• Country: JP
• Employees: 111,733
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 91.89
• Shares Outstanding: 1,333,763,400
• 10 Day Avg. Volume: 3,121,560
• 30 Day Avg. Volume: 2,857,590
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥5,250.00
• Price Target Upside: 19.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 67 Neutral
• Price Target: ¥4,725.00 ▲(7.24% Upside)

Canon Inc.'s overall stock score reflects strong financial stability and a solid balance sheet, which are offset by declining revenue growth and negative free cash flow growth. The technical analysis indicates a neutral trend with some bullish momentum, while the valuation suggests moderate pricing with an attractive dividend yield.

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. demonstrates strong financial stability with efficient cost management and a solid balance sheet. However, declining revenue growth and negative free cash flow growth pose challenges. The company needs to address these issues to sustain long-term profitability and growth.

Income Statement

Canon Inc. shows a stable gross profit margin around 47%, indicating efficient cost management. However, the net profit margin has decreased to 3.76% in TTM, reflecting challenges in converting revenue into profit. The revenue growth rate is negative at -0.60% TTM, suggesting a decline in sales. EBIT and EBITDA margins are healthy, but the recent decline in revenue growth is a concern.

Balance Sheet

Canon maintains a strong balance sheet with a low debt-to-equity ratio of 0.32 TTM, indicating conservative leverage. The return on equity is modest at 5.14%, showing moderate profitability. The equity ratio is healthy, suggesting a stable financial structure with a good proportion of equity financing.

Cash Flow

The operating cash flow to net income ratio is 0.31 TTM, indicating adequate cash generation relative to net income. However, free cash flow growth is negative at -22.84% TTM, highlighting potential cash flow challenges. The free cash flow to net income ratio remains strong at 0.61, showing good cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.55T	4.51T	4.18T	4.03T	3.51T	3.16T
Gross Profit	2.15T	2.14T	1.97T	1.83T	1.63T	1.38T
EBITDA	638.88B	540.37B	631.71B	579.98B	524.60B	358.96B
Net Income	166.12B	160.03B	264.51B	243.96B	214.72B	83.32B
Balance Sheet
Total Assets	5.97T	5.77T	5.42T	5.10T	4.75T	4.63T
Cash, Cash Equivalents and Short-Term Investments	721.99B	506.34B	405.14B	373.01B	404.77B	407.75B
Total Debt	1.12T	663.50B	517.32B	417.41B	320.97B	506.17B
Total Liabilities	2.49T	2.12T	1.81T	1.75T	1.65T	1.84T
Stockholders Equity	3.21T	3.38T	3.35T	3.11T	2.87T	2.58T
Cash Flow
Free Cash Flow	282.30B	369.83B	220.88B	74.08B	273.68B	169.09B
Operating Cash Flow	523.74B	606.83B	451.19B	262.60B	451.03B	333.81B
Investing Cash Flow	-272.54B	-297.32B	-275.37B	-180.82B	-207.26B	-155.44B
Financing Cash Flow	-106.41B	-226.00B	-156.73B	-146.84B	-267.37B	-183.45B

Canon Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4406.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 4406 is below the 20-day moving average (MA) of 4406.90, above the 50-day MA of 4386.32, and below the 200-day MA of 4478.89, indicating a neutral trend. The MACD of 18.04 indicates Positive momentum. The RSI at 50.30 is Neutral, neither overbought nor oversold. The STOCH value of 46.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7751.

Canon Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6588	75 Outperform	€166.48B	7.45	23.27%	1.49%	-1.36%	―
7739	75 Outperform	¥112.78B	15.61	―	2.57%	7.82%	3.26%
6737	70 Outperform	¥91.49B	23.72	―	4.88%	-0.61%	-16.31%
6724	70 Neutral	$624.13B	14.86	5.27%	3.82%	0.86%	-15.62%
7751	67 Neutral	¥4.30T	24.88	―	3.52%	4.76%	-39.64%
6727	66 Neutral	$107.92B	26.87	13.28%	4.07%	-10.35%	-12.87%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%