Garmin (GRMN): Apple Watch Launch Positive Relative to Expectations, Says Goldman

Goldman Sachs maintained a Neutral rating on Garmin Ltd. (NASDAQ: GRMN) with a price target of $61. Analyst Simona Jankowski called Apple's Watch launch an "incremental positive" for Garmin relative to expectations.

"We have considered the availability of an Apple Watch as a key competitive risk to Garmin’s fitness products. That said, we view the announcement as an incremental positive for Garmin relative to expectations, as 1) the launch will come after the 2014 holiday season and 2) the device does not have embedded GPS technology. Furthermore, the price point positions it at the high end the market, which should limit competition with the emerging fitness tracker category (products such as the Vivofit). There remains risk of demand pause ahead of the Apple Watch availability. There is no change to our estimates: we model 58% yoy Fitness revenues growth in 2H14 vs 60% growth in 1H14, and subsequent deceleration to 10% growth in 2015. Without question, the market is becoming more competitive with the Apple Watch, Moto 360, and a host of Samsung products."

"We expect Garmin will remain an industry leader (especially in niche fitness categories) given brand recognition, niche product applications, solid distribution, and continued product innovation," added the analyst.

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 $51.71 yesterday.

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