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Canon (CAJ) Gains As Market Dips: What You Should Know

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Canon (CAJ - Free Report) closed at $25.04 in the latest trading session, marking a +0.48% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.03%. Elsewhere, the Dow lost 1.48%, while the tech-heavy Nasdaq lost 0.24%.

Coming into today, shares of the office machine company had gained 10.9% in the past month. In that same time, the Computer and Technology sector lost 4.42%, while the S&P 500 lost 0.62%.

Canon will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.42, down 14.29% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.26 billion, down 2.45% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.76 per share and revenue of $32.62 billion, which would represent changes of +131.58% and +8.48%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Canon. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.19% higher within the past month. Canon is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Canon currently has a Forward P/E ratio of 14.16. For comparison, its industry has an average Forward P/E of 16.96, which means Canon is trading at a discount to the group.

Meanwhile, CAJ's PEG ratio is currently 14.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Office Automation and Equipment stocks are, on average, holding a PEG ratio of 14.16 based on yesterday's closing prices.

The Office Automation and Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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