Bear of the Day: Fujifilm Holdings – ADR (FUJIY)

We downgrade our rating of Fujifilm Holdings (FUJIY) to Underperform, backed by Fuji’s stock performance primarily based on currency fluctuation impact, rising raw material prices and the recent Great East Japan earthquake aftermath.

Moreover, decrease in demand for FDP materials and declining profitability at the digital camera business due to intense price competition weakens our outlook on the stock. The company’s earnings per ADR in fiscal 2011 were recorded at $1.47, below the Zacks Consensus Estimate of $1.62 per ADR.

However, Fuji’s plan for establishment in the emerging markets with innovative products, sales promotion as well as its structural reforms in the existing business may help to recover the anticipated bullish performance.

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