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Canon Inc. (JP:7751)
:7751
Japanese Market

Canon Inc. (7751) AI Stock Analysis

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JP

Canon Inc.

(7751)

Rating:70Outperform
Price Target:
¥5,151.00
▲(22.96%Upside)
Canon Inc. maintains a robust financial standing with strong profitability and cash flow generation. While technical indicators suggest potential for upward momentum, they also highlight recent downward trends. The stock's high P/E ratio indicates possible overvaluation, although this is somewhat offset by an attractive dividend yield. Overall, Canon's financial health and stability in the computer hardware industry contribute positively, but valuation concerns and recent technical trends weigh on the score.

Canon Inc. (7751) vs. iShares MSCI Japan ETF (EWJ)

Canon Inc. Business Overview & Revenue Model

Company DescriptionCanon 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 MoneyCanon Inc. generates revenue through multiple streams, primarily driven by its diverse product portfolio. The company's key revenue streams include the sale of cameras and imaging products, which cater to both consumer and professional markets; the office business unit, which provides multifunction devices, printers, and related services; and the medical systems segment, offering diagnostic imaging solutions and healthcare technologies. Canon also earns income from its industrial products segment, which produces semiconductor and flat-panel display equipment. Additionally, the company benefits from strategic partnerships and collaborations that enhance its technological capabilities and market reach, as well as after-sales services and consumables, such as printer cartridges, which provide steady recurring revenue.

Canon Inc. Financial Statement Overview

Summary
Canon Inc. exhibits a strong financial position with commendable profitability and cash flow generation capabilities. The income statement shows solid growth and profitability, while the balance sheet reflects stability with low leverage. Despite slight concerns over operational efficiency and capital stability, the company's overall financial health remains positive, supporting its competitive stance in the computer hardware industry.
Income Statement
78
Positive
Canon Inc. demonstrates strong profitability with a solid gross profit margin of 47.3% and a net profit margin of 3.8% on a TTM basis. Revenue growth rate improved to 6.5% in the latest period, indicating positive momentum. EBIT and EBITDA margins reflect stable operational efficiency. However, the declining EBIT margin over recent years suggests potential operational challenges.
Balance Sheet
74
Positive
The balance sheet of Canon Inc. is robust with a solid equity ratio of 54.7%. The debt-to-equity ratio remains manageable at 0.32, indicating a conservative leverage approach. Return on equity stands at 5.4%, reflecting moderate returns to shareholders. However, a slight decrease in stockholder's equity raises a cautionary note regarding long-term capital stability.
Cash Flow
82
Very Positive
Canon Inc.'s cash flow performance is impressive with a high operating cash flow to net income ratio of 3.49, indicating strong cash generation relative to profits. Free cash flow growth rate is modest at -1.08%, yet the free cash flow to net income ratio remains healthy at 2.12. The company's ability to generate cash flow efficiently supports its operations and potential investments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.58T4.51T4.18T4.03T3.51T3.16T
Gross Profit2.17T2.14T1.97T1.83T1.63T1.38T
EBITDA691.06B540.37B631.71B579.98B524.60B358.96B
Net Income172.31B160.03B264.51B243.96B214.72B83.32B
Balance Sheet
Total Assets5.87T5.77T5.42T5.10T4.75T4.63T
Cash, Cash Equivalents and Short-Term Investments701.92B506.34B405.14B373.01B404.77B407.75B
Total Debt1.02T663.50B517.32B417.41B320.97B506.17B
Total Liabilities2.39T2.12T1.81T1.75T1.65T1.84T
Stockholders Equity3.22T3.38T3.35T3.11T2.87T2.58T
Cash Flow
Free Cash Flow365.85B369.83B220.88B74.08B273.68B169.09B
Operating Cash Flow601.55B606.83B451.19B262.60B451.03B333.81B
Investing Cash Flow-261.64B-297.32B-275.37B-180.82B-207.26B-155.44B
Financing Cash Flow-144.36B-226.00B-156.73B-146.84B-267.37B-183.45B

Canon Inc. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4189.00
Price Trends
50DMA
4279.72
Negative
100DMA
4506.43
Negative
200DMA
4662.92
Negative
Market Momentum
MACD
-46.32
Negative
RSI
46.48
Neutral
STOCH
8.32
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7751, the sentiment is Neutral. The current price of 4189 is above the 20-day moving average (MA) of 4187.82, below the 50-day MA of 4279.72, and below the 200-day MA of 4662.92, indicating a neutral trend. The MACD of -46.32 indicates Negative momentum. The RSI at 46.48 is Neutral, neither overbought nor oversold. The STOCH value of 8.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7751.

Canon Inc. Risk Analysis

Canon Inc. disclosed 20 risk factors in its most recent earnings report. Canon Inc. reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Canon Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
¥4.04T23.40
3.82%9.08%-33.61%
66
Neutral
€2.82B14.593.54%2.81%6.71%-64.23%
$4.22B10.756.70%4.15%
$631.95M19.6315.32%0.02%
€952.15M4.8630.22%1.71%
75
Outperform
¥104.69B14.39
2.73%8.95%4.60%
71
Outperform
¥91.61B21.36
4.88%0.03%-23.96%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7751
Canon Inc.
4,189.00
-68.12
-1.60%
SEKEF
Seiko Epson
11.90
-3.23
-21.35%
WACMF
Wacom Co
4.76
0.13
2.81%
DE:TECA
Toshiba Tec Corp.
16.80
-2.22
-11.67%
JP:6737
EIZO Corp.
2,153.00
-195.89
-8.34%
JP:7739
Canon Electronics Inc.
2,562.00
308.89
13.71%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 17, 2025