We recently upgraded our recommendation on
Fujifilm Holdings Inc.
), a Japan-based company, from Underperform to Neutral based on
solid market fundamentals.
In the last reported quarter, the company reported an increase
in the medical systems and life sciences business. The Document
Solutions business saw a marginal increase in its revenue;
overshadowed by a weak European economy. In addition, the company
is currently expanding outside Japan to increase its revenue
besides augmenting its product and service portfolio.
The company's efforts to reduce costs in order to maintain and
in turn increase margins seem to pay off. Despite a steep rise in
raw material costs, the gross margin for the company decreased by
a meager 50 basis point in the third quarter of fiscal 2013 as
compared to the year-ago quarter. Fuji was able to pull off a
high net income of $101.3 million, far exceeding $5.0 million
earnings reported in the year-ago quarter.
Consequently, the company is expected to perform in line with
the broader market, thus inducing a Neutral recommendation
However, the company seems to fall much below the initial
revenue generation in the traditional imaging business in the
world of digitalization. Moreover, cut-throat rivalry from
), who have been continuously developing, launching and marketing
hi-tech digital expertise, further threatens the company's
traditional businesses. Also the risk of overcapacity in
photo-imaging and photographic films sector is likely to depress
The current Zacks Consensus Estimate for fiscal 2013 is $1.27,
representing a year-over-year increase of 14.4%. Estimate for
fiscal 2014 is $1.50, reflecting annual growth of 18.1%.
The stock currently bears a Zacks #3 Rank (Hold), while its
prime competitors Canon has a Zacks #4 Rank (Sell) and
) has a Zacks #3 Rank (Hold).
CANON INC ADR (CAJ): Free Stock Analysis
FUJIFILM HLDGS (FUJIY): Free Stock Analysis
PHOTRONICS INC (PLAB): Free Stock Analysis
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