This Business Week article includes a quote from the S&P 500 analyst who recently downgraded Canon: "'Canon has been one of the few electronics companies able to maintain double-digit margins, but [Canon's second-quarter operating profit] shows that even Canon isn't immune to price pressure,' says John Yang". The other concern seems to be who might replace CEO Fujio Mitarai, who is 69.
According to SmartMoney.com's DCF calculator, Canon's current price assumes about 1.5% earnings growth. The article suggests 6 to 7% growth which works out to about $60 an ADR. Given more productivity gains and a return on the company's R&D investment, I think Canon is a good value.