Canon (7751.T): Needs to execute restructuring, boost growth strategy transparency

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Canon (7751.T): Needs to execute restructuring, boost growth strategy transparency

Viewpoint |

07 Jul 2026 02:51:01 ET │ 13 pages

Canon (7751.T)

Needs to execute restructuring, boost growth strategy transparency

CITI'S TAKE

FY12/26 consensus forecasts are below downwardly revised guidance,

which appears overly pessimistic given boosts such as the weak yen and

tariff refunds, and the dividend yield is c4%. Meanwhile, we believe the Buy

medium-term targets issued in January are not reflected in the share price. Price (06 Jul 26 15:30) ¥4,338.0

We believe the current frontline management team has a healthy sense of

Target price ¥4,700.0crisis and see the firm’s on-the-ground execution capabilities as robust, but

these are not fully appreciated by the equity market, in our view. We believe Expected share price return 8.3%

the company needs to provide more transparent explanations regarding its Expected dividend yield 3.7%

measures to boost profitability at existing businesses (including additional

Expected total return 12.0%measures) and its growth strategies for new businesses (particularly

semiconductor manufacturing equipment). Market Cap ¥3,684,287M

US$22,831M

New MTP announced in January appears ambitious — Canon announced a new

five-year plan on January 15. It set targets of ¥5 trillion in sales and ¥600bn in OP for

FY12/28, and ¥5.6 trillion in sales ¥840bn for OP in FY12/30. Compared to FY12/26

guidance (¥4.76 trillion and ¥456bn) these targets appear ambitious. Price Performance

Progress on structural reforms, but additional action needed — Since 2024 Canon (RIC: 7751.T, BB: 7751 JP)

has moved forward with sales reforms, production reforms (printing), and medical

business innovation. In particular we like decisive actions in printing such as