Outdoor financials: Analyst raises Columbia Sportswear's rating and price target, plus Garmin

Columbia Sportswear's conservative full-year outlook and underperforming stock prompted Goldman Sachs to upgrade its rating and price target on company. Plus, Garmin shares drop after analyst downgrade.
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Analyst raises Columbia Sportswear's rating and price target

Columbia Sportswear's conservative full-year outlook and underperforming stock prompted Goldman Sachs to upgrade its rating and price target on company.

Analyst Michelle Tan wrote in a client note that Columbia's full-year forecast plays it close to the vest, which significantly lowers the likelihood of downside catalysts. In July, Columbia reaffirmed its previous full-year guidance, saying it expects sales to decline in the low double-digits for the year.

Tan said Columbia's shares have climbed 22 percent since she initiated a "sell" rating in February, compared with a 34 percent increase in the S&P 500. In comparison to the rest of her apparel and footwear coverage, Columbia's stock is off 15 percent in the past year, while other apparel and footwear companies are down 3 percent.

Tan lifted Columbia to "neutral" from "sell" and increased her six-month price target to $29 from $28. That still implies downside of 16.9 percent from its closing price on Aug. 11 of $34.89.

Garmin shares drop after analyst downgrade

Shares of Garmin (Nasdaq: GRMN) dropped nearly 4 percent on Aug. 12, after Goldman Sachs predicted weakness in the market for personal navigation devices.

Goldman analyst Thomas Lee wrote in a research note that slowing demand could translate into worse-than-expected results for the company in the fourth quarter and next year. Already rated "sell," he added the stock to his Americas Conviction Sell List.

Along with fresh competition, Garmin risks cannibalizing its personal navigation business with its own line of smart phones, Lee wrote. He added that the "market is overestimating the sustainability of the company's strong" second-quarter margins.

For the second quarter, Garmin reported earnings of $0.83 per share, and a 27 percent drop in sales to $669.1 million.

Garmin shares fell $1.30, or 4 percent, to $31.15 in afternoon trading. It closed at $31.27.

--Compiled by Wendy Geister

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