Canon Inc. (TSE:7751) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates

Canon Inc. (TSE:7751) just released its latest quarterly report and things are not looking great. Results look to have been somewhat negative - revenue fell 3.4% short of analyst estimates at JP¥1.1t, and statutory earnings of JP¥71.88 per share missed forecasts by 3.9%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Canon

After the latest results, the eleven analysts covering Canon are now predicting revenues of JP¥4.60t in 2025. If met, this would reflect an okay 4.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 13% to JP¥360. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.60t and earnings per share (EPS) of JP¥359 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,950. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Canon analyst has a price target of JP¥5,700 per share, while the most pessimistic values it at JP¥3,500. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. It's pretty clear that there is an expectation that Canon's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 5.9% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.8% per year. So it's pretty clear that, while Canon's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥4,950, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Canon analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Canon that you need to be mindful of.

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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.