UPDATE: Citi Upgrades Garmin (GRMN) to Buy on Wearables/vivofit

March 26, 2014 9:27 AM EDT
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Price: $48.52 --0%

Rating Summary:
    5 Buy, 14 Hold, 3 Sell

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    Up: 0 | Down: 0 | New: 0
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(Updated - March 26, 2014 10:49 AM EDT)

Citi upgraded Garmin Ltd. (NASDAQ: GRMN) from Neutral to Buy with a price target of $65.00 (from $50). Analyst Jeremy David is bullish given the company's exposure to wearables and he likes vivofits's prospects.

"Garmin introduced its first activity monitor, vívofit, in January, entering an emerging wearable market that so far has been closely associated with Fitbit. Garmin has been in transition since PND shipments peaked in 2008. In its search for growth, Garmin has recently entered two emerging billion dollar markets: action cameras and activity monitors. While we have been cautious on the VIRB action camera, and continue to be cautious, we are excited about the prospects for vívofit," said David.

"We believe Garmin can become a top 2 player in the activity monitor market over the next 6 months - vívofit is the only wrist-based activity monitor with a 1+year battery life, and it is reasonably priced, making it well positioned to win customers considering price and battery life are the top two features buyers look for. vívofit reviews on Amazon are very positive, and our retail checks are promising," continued the analyst. "Fitbit's recall of its Force activity monitor creates a vacuum that vívofit is likely to fill in the near-term. Fitbit released its Force monitor in October, shipping over 1M units, but stopped selling it last month, and went as far as recalling it as the number of users complaining about irritations on their wrists grew. We believe retailers are likely to position Garmin's vívofit as a substitute to Fitbit's Force."

For an analyst ratings summary and ratings history on Garmin Ltd. click here. For more ratings news on Garmin Ltd. click here.

Shares of Garmin Ltd. closed at $54.46 yesterday.

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