Investment Manager Unveils Jefferies' Price Target Increase for Canon Inc. (7751:JP) (NYSE:CAJ) – Is It Time to Buy?
In a recent development, Jefferies raised its price target on Canon Inc. (7751:JP) (NYSE:CAJ) to JPY4,650 from JPY4,400, while maintaining a Hold rating on the stock. The move comes after Canon reported a remarkable 28.3% year-over-year increase in operating profit for the second quarter of the fiscal year ending December 2024, exceeding market expectations.
Canon also revised its full-year guidance, projecting a 23.9% rise in operating profit to JPY465.0 billion, up by JPY30 billion from the previous year. The company's outlook for the second half of the fiscal year includes foreign exchange assumptions of JPY155 per US dollar and JPY165 per euro.
Despite the positive results and optimistic guidance, Jefferies highlighted the challenge posed by the appreciation of the Japanese yen. The firm emphasized Canon's need to address the adverse impact of unfavorable currency movements through its restructuring efforts.
As a result of these factors, Jefferies adjusted its estimates for Canon and raised the price target. However, the firm decided to retain its Hold rating on the stock, signaling a neutral stance on Canon's investment potential in the current scenario.
In conclusion, investors should closely monitor Canon's ability to navigate the currency headwinds and execute its restructuring plans effectively to sustain its growth momentum. The revised price target by Jefferies reflects a cautious optimism towards Canon's performance, but it is essential to assess the company's ongoing strategies and market dynamics before making any investment decisions.