Outdoor financials: Garmin casualty of falling GPS pricing

Garmin was a casualty of falling GPS pricing.
Author:
Updated:
Original:

Garmin casualty of falling GPS pricing

Analysts at Deutsche Bank and Wedbush Morgan expressed concerned about rampant discounting of GPS devices and its effect on Garmin (Nasdaq: GRMN), bringing down their target price for the company's stock.

Deutsche Bank's Jonathan Goldberg cut his target to $14 from $18. He noted in a client note that personal navigation devices (PND) prices were down 35 percent from last year, "and seem unlikely to recover."

He said Garmin products, which used to sell at about a $100 premium to second-tier brands, now sell for a premium of only about $20. He wrote in a client note, "Many consumers are trading down," with low-price point products selling, while higher-priced items "remain untouched." He has a "sell" rating on Garmin.

Wedbush Morgan's Scott Sutherland cut his target on the stock to $19 from $26. He cut his 2008 EPS estimate to $3.63 from $3.72; for 2009, he goes to $3.14 from $3.52. The estimate cuts, he wrote in a client note, reflect "a weakening consumer, likely leaner channel inventory, and channel checks." He maintained a "hold" rating.

RBC Capital's Mark Sue said that strong unit growth in the current quarter could be offset by lower margins as device pricing falls. Sue wrote in a research note that "low barriers to entry in the PND segment, pricing and the growth of converged devices may create headwinds for the company." He kept his "underperform" rating on the stock.

Garmin shed $1.63 to hit $15.40 for a day's low on Dec. 1. It closed at $15.53. Its 52-week range is $14.40 to $112.68.

--Compiled by Wendy Geister

For more information about any public company on this page or its financial reports, as well as to view stock prices updated every 15 minutes, visit the SNEWS® Stock Market Updates. Click on: www.snewsnet.com/cgi-bin/snews/stock_report.html.

Related

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

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 ...read more

Outdoor financials: VF shares fall despite analyst upgrade, plus Garmin, Johnson Outdoors, Eddie Bauer

VF shares fall despite analyst upgrade VF Corp. (NYSE: VFC) shares took a hit on Oct. 2 -- along with the broader market -- despite positive comments from an analyst following the company's investor day meeting. Citi Investment Research analyst Kate McShane said the analyst ...read more

Outdoor financials: Garmin shares fall on analyst observations, plus Hanesbrands, Liberty Media/Backountry.com

Garmin shares fall on analyst observations Shares of Garmin (Nasdaq: GRMN) dropped after an analyst said demand seems sluggish following a visit to one of the company's Taiwan plants. "The factory was busy with activity, but management indicated they were not fully utilized," ...read more

Fitness financials: Analyst raises Garmin's rating to buy

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 ...read more

Outdoor financials: Deckers appoints new CFO, plus Cabela's, Garmin

Deckers appoints new CFO Deckers Outdoor Corp. (Nasdaq: DECK), parent of Teva, Ugg, Simple and Ahnu, said it appointed Thomas George as chief financial officer, effective immediately, after the position was vacated by Thomas Hillebrandt who resigned in March to pursue other ...read more

Outdoor financials: Deckers shares hit all-time high, plus Crocs, Garmin, Cabela's, Amer Sports

Deckers shares hit all-time high Shares of Deckers Outdoor (Nasdaq: DECK), parent of Teva, Uggs and Simple, reached an all-time high on Nov. 27, after an analyst initiated coverage on the company with a "Buy" rating. Sterne Agee analyst Sam Poser said in a note to investors that ...read more

Outdoor financials: Duofold parent to close 9 plants, cut 8,100 jobs, plus Garmin, Cabela's, Collective Brands

Duofold parent to close 9 plants, cut 8,100 jobs Hanesbrands (NYSE: HBI), parent of Duofold, said it will close nine plants across five countries and cut about 12 percent of its work force as it restructures its operations in order to cut costs. The moves will eliminate the jobs ...read more

Outdoor financials: Timberland Q1 earnings nearly double, plus Cabela's, Exel sells outdoor business to Karhu Sports, Garmin

Timberland Q1 earnings nearly double Timberland (NYSE: TBL) said its first-quarter profit nearly doubled on a decline in operating expenses and strong European sales growth. For the three months ended March 28, the company reported income of $18 million, or $0.30 per share, ...read more

Outdoor financials: Eddie Bauer gets notice of stock delisting, plus Garmin

Eddie Bauer gets notice of stock delisting, court OKs 'first day motions' Eddie Bauer (Nasdaq: EBHI), which filed for Chapter 11 bankruptcy protection, said it received notice from the Nasdaq Stock Market it will be delisted. The stock will be suspended on June 26. At that time, ...read more