Fitness financials: Analyst raises Garmin's rating to buy

A Bank of America/Merrill Lynch analyst raised his rating on Garmin, telling clients that there are signs that the market for GPS systems is improving.
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Analyst raises Garmin's rating to buy

A Bank of America/Merrill Lynch analyst raised his rating on Garmin (Nasdaq: GRMN), telling clients that there are signs the market for GPS systems is improving.

Bank of America's Vivek Arya raised his rating on Garmin to "buy" from "underperform," and also lifted his price target on the stock to $45 a share from $30. He wrote in a research note there are improving signs of business in the market for GPS systems in cars, and that concerns about its products being cannibalized by smart phones with built-in GPS are overdone.

Garmin is benefiting from what he called its "unappreciated" business segments outside personal navigation, including its aviation, marine and outdoor and fitness products, according to Arya. Those segments contribute about 30 percent of Garmin's sales, but account for 45 percent of the company's operational earnings.

--Compiled by Wendy Geister

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