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UPDATE: Goldman Sachs Downgrades Garmin Ltd. (GRMN) to Neutral; FX Headwinds and Weakening Fitness Segment

April 2, 2015 6:24 AM EDT
Get Alerts GRMN Hot Sheet
Price: $148.87 +0.60%

Rating Summary:
    6 Buy, 17 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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(Updated - April 2, 2015 10:48 AM EDT)

Goldman Sachs downgraded Garmin Ltd. (NASDAQ: GRMN) from Buy to Neutral with a price target of $54.00 (from $63.00), saying catalysts have passed and datapoints have weakened.

Analyst Simona Jankowski said, "we believe the key catalysts that drove our thesis are now behind us, while risks from competition and currency have increased."

Jankowski said despite significant upside in Q1 and 2015 guidance from the important Fitness segment, shares have been under pressure "from concerns around the sustainability of Fitness revenue growth, FX headwinds, increased competition, and the longer term threat from the Apple Watch."

The analyst notes 47% of the company's total revenues are exposed to foreign currencies.

Further, the analyst said retail checks point to weakening momentum in the Fitness segment in 1Q. "Garmin now has only 1 out of the top 10 most popular fitness bands on Amazon (Fitbit has top 6), down from 3-4 positions in 4Q, as we believe its software syncing issues have dampened follow-through demand after the strong holiday promotion season. In addition, Fitbit’s new Surge GPS watch has overtaken Garmin as the most popular fitness watch on Amazon."

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 $47.07 yesterday.



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