Canon: Key Valuation Re-Rating Driver Is ROE Improvement

Aug. 17, 2023 1:17 PM ETCanon Inc. (CAJPY) Stock, CAJFF StockCAJPY, CAJFF
The Value Pendulum
Investing Group Leader

Summary

  • Canon Inc.'s current P/B multiple is below its long-term historical mean.
  • The company can potentially improve its ROE by introducing new products, optimizing its business mix, and return more excess capital to shareholders.
  • l have a Buy rating for Canon, as I think that the stock can be valued by the market at a higher P/B ratio when it achieves a better ROE.
  • Looking for more investing ideas like this one? Get them exclusively at Asia Value & Moat Stocks. Learn More »

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Justin Sullivan

Elevator Pitch

I award a Buy rating to Canon Inc. (OTCPK:CAJPY, CAJFF) [7751:JP] stock. I believe that Canon can trade at a higher P/B valuation ratio with an improvement in its ROE driven by better profitability and continued

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This article was written by

The Value Pendulum
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The Value Pendulum is an Asian equity market specialist with over a decade of experience on both the buy and sell sides.

He is the author of the investing group Asia Value & Moat Stocks, providing ideas for value investors seeking investment opportunities listed in Asia, with a particular focus on the Hong Kong market. He hunts for deep value balance sheet bargains and wide moat stocks and provides a range of watch lists with monthly updates within his investing group.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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