Canon Inc. (TSE:7751) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to JP¥4,697 in the week after its latest third-quarter results. It looks like a credible result overall - although revenues of JP¥1.2t were what the analysts expected, Canon surprised by delivering a (statutory) profit of JP¥89.73 per share, an impressive 38% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Canon's eleven analysts is for revenues of JP¥4.91t in 2027. This would reflect a credible 3.2% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 9.0% to JP¥392 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.92t and earnings per share (EPS) of JP¥396 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for Canon
There were no changes to revenue or earnings estimates or the price target of JP¥4,786, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Canon analyst has a price target of JP¥5,700 per share, while the most pessimistic values it at JP¥4,300. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Canon's revenue growth is expected to slow, with the forecast 2.5% annualised growth rate until the end of 2027 being well below the historical 6.1% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Canon is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Canon's revenue is expected to perform worse than the wider 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Canon going out to 2028, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 1 warning sign for Canon you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.