JPMorgan Downgrades Garmin Ltd. (GRMN) to Neutral, 'Muted Consumer Spending'

JPMorgan analyst Samik Chatterjee downgraded Garmin Ltd. (NYSE: GRMN) from Overweight to Neutral with a price target of $135.00.

The analyst comments "We are downgrading shares of Garmin to Neutral from Overweight on our expectation for limited upside as we modestly moderate our revenue forecast on a slightly more muted outlook relative to underlying consumer spending following a solid holiday season, which we believe was bolstered by a product cycle and channel fill, and more materially reduce our earnings forecast on the aforementioned in combination with the risk associated with the implementation of a higher corporate tax rate in Switzerland, which we estimate can equate to roughly a 30 cent headwind to EPS on a stand-alone basis. Despite our lower earnings forecast, we are maintaining our December 2024 price target of $135 based on ~23x target multiple (vs. ~21x prior), which is in line with the recent average trading multiple and a slight discount to the current NTM multiple, as we believe it is justified based on our SOTP analysis as we value Garmin’s traditional hardware business segments in a range of 20-25x, while the Auto OEM business segment is valued at a lower ~15x multiple, which is in line with Auto peers, and takes into account customer concentration risk as well as the headwinds to key financial metrics as its ramps from a sub-scale state."

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 $122.85 yesterday.

You May Also Be Interested In

• JD.com (JD) Reiterated at Buy by Benchmark Amid Earnings Recovery
• Target (TGT) PT Raised to $146 at Piper Sandler
• Adeia (ADEA) PT Raised to $50 at BWS Financial