Zacks Investment Research downgraded FUJIFILM Holdings Corporation FUJIY to a Zacks Rank #4 (Sell) from a Zacks Rank #3 (Hold) on Dec 18, 2015. Going by the Zacks model, stocks carrying a Zacks Rank #4 are likely to underperform the broader market over the next few quarters.
Why the Downgrade?
Fujifilm tries to increase its revenues with the essence of greater business internationalization. However, this exposes the company to several external headwinds. For instance, economic recession continues to hurt the company’s business in China. Lower supply of cash has been weighing on consumer demand, and hence adversely affecting sales of Fujifilm’s products in the Chinese market.
Moreover, extensive industry rivalry compels the company to spend heavily toward innovation purposes. The resultant higher expenses exert pressure on Fujifilm’s liquidity and often go in vain if the invented technology becomes obsolete within a short span of time. At the same time, declining electric imaging revenues, and poor sales of camera modules & FPD materials are anticipated to weigh on the company’s aggregate revenue in the quarters ahead.
Stocks to Consider
Better-ranked stocks in the industry include Photronics Inc. PLAB, AAC Technologies Holdings Inc. AACAY and Actua Corporation ACTA. While Photronics sports a Zacks Rank #1 (Strong Buy), both AAC Technologies and Actua Corporation hold a Zacks Rank #2 (Buy).
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