These firms warn that EK will fail to sustain the momentum in its current digital business, its inkjet business will fall short of its goals, and the profitability of the traditional film business will suffer significantly from the current level. These firms remain concerned about the company’s heavy dependence on entertainment imaging profits and its entry into the notoriously competitive inkjet printing space, suggesting that the stock could remain under pressure until the company can show progress on its plan. Also, these firms remain concerned about the sustainability of EK’s cash flow, given the margin pressure in the film products group, weaker-than-expected margins in the graphic communications business, and continued investment required, which has been much slower than expected. Moreover, these firms do not see a road to sustainable revenue and profit growth in the coming years and uncertainty will likely lead to further job cuts as EK works to align its cost structure. EK has seen dramatic declines in several of its key businesses due to the slowdown in consumer spending and significantly reduced demand for capital
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