There are at least 2 web-based services that track what the Wall
Street analysts have to say about companies. It?s a good way to look
at the competitive marketplace for a company like Canon and see a
variety of opinions.
The first service is free and you?ll find out quite a bit by doing a
search on its pages for Canon:
Search for Canon News (Sept. 19, 2005)
For example, from the Canon summaries, we can learn that:
? sales predicted to rise by more than 11% this fiscal year. JP
Morgan says that slower-than-expected fall in prices of digital
cameras and further cost-cutting measures likely to have boosted
profits. However, concerns remain about escalation of competition in
office equipment operations.
? A just-completed J.D. Power survey of digital camera owners put
Eastman Kodak and Sony Corp atop surveys for customer satisfaction,
while Canon has slipped in most categories.
? Morgan Stanley has continued to ?overweight? Canon in its portfolio,
citing efficient use of cash, cost reduction, and a strategic edge in
LBP (laser beam color printers). The company has a target price of
7000 yen for the stock (about $63).
? Canon sales have been down within recent quarters due to lower OEM
sales of laser printers to Hewlett-Packard.
The second service that tracks Wall Street analyst activities is
Investext, a fee-based service available for no charge at many public
libraries. Investext is published by Thomson-Gale and sometimes
appears under their ?Business Resource Center? database. It is more
interesting because it has detailed analysts? reports ? and you get to
know who specifically follows a company?s stock. That allows you to
use Google to find other comments that may have appeared in industry
publications like Computerworld or even business news stories from
Some information that can be helpful from recent Investext reports:
? Kunihiko Kanno, the analyst that covers the firm for Credit
Suisse/First Boston, notes in late August that Canon acquired both NEC
Machinery and Anelva, the former a factory-automation company and the
latter a flat panel production equipment company. Kanno says that
Anelva will allow Canon to move production of manufacturing equipment
for SEDs (surface-conduction electron emitter displays) in-house. The
NEC Machinery acquisition could be quite large, with a potential cost
of 10 billion yen.
? Kanno also tracks Hewlett-Packard sales of laser-based printers
closely because of it impact on Canon, the OEM.
? Shima Nakao tracks Canon for Morgan Stanley. Nakao says that Canon
has predicted price declines of 9% in compact cameras (after
originally predicting 18%) and 10% in SLRs (up from 8%). The compact
camera market continues to fall, though Canon hopes that higher
resolution models will stem that decline. Digital camera sales volume
was 41 million units for the past 12 months and the division is at
least marginally profitable. However, Nakao forecasts price declines
in cameras at 12% per year in the near-term.
? Satoomi Ushoda, in a July report on Canon done by Smith Barney (part of
Citigroup), puts the company?s price target at $62. In Q2, 2005,
Ushoda says that strengths were in sales of SLR cameras and digicams,
as well as reduced headquarters expenses. However, office equipment
sales were $222 million (not yen) below Smith Barney?s projections for
the product line. Inkjet printers were particularly poor performers
due to price wars in Europe and North America.
? Ryohei Takahashi, analyst for UBS, is more neutral on Canon in a
report written in late April. With a price target of 5,600 yen for
the company, he sees risks in digital camera sales, particularly in
competition with camera-based cellphones. However, strong points for
the company are its color copiers and IC steppers (for LCD
production). Takahashi says that major risks to the stock ? besides
competition in digital cameras ? are:
1. exchange rates: each change of 1 yen with the dollar reduces
earnings by 5 billion yen (3.5 billion Euros with every 1 yen change)
2. continued risk of printer inventory reductions at H-P
3. slow U.S. office markets, which account for more than 31% of Canon?s sales
As previously mentioned, you can often find these same analysts quoted
on business and markets. Here?s just one example, using the following
Google search strategy:
?ryhohei takahaski? UBS
Digital Photography Review
Some companies list the analysts that follow them on Investor
Relations pages. Canon does not. That?s an additional way to track
news & analysis of the company ? by doing a Google search for ?Canon?
+ ?analyst name?:
Canon Investor Relations
Google search strategy:
Canon + ?investor relations?
Canon + LBP