Canon Inc. (TSE:7751) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Canon Inc. (TSE:7751) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Canon reported in line with analyst predictions, delivering revenues of JP¥1.1t and statutory earnings per share of JP¥166, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Canon's eleven analysts are forecasting 2025 revenues to be JP¥4.65t, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 95% to JP¥363. Before this earnings report, the analysts had been forecasting revenues of JP¥4.68t and earnings per share (EPS) of JP¥370 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Canon

The consensus price target held steady at JP¥5,245, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Canon, with the most bullish analyst valuing it at JP¥6,500 and the most bearish at JP¥4,300 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Canon's past performance and to peers in the same industry. We would highlight that Canon's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2025 being well below the historical 7.5% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.4% annually. So it's pretty clear that, while Canon's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Canon. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Canon going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Canon that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.