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Apple Watch a Serious Threat for Fossil (FOSL) - Sterne Agee

September 10, 2014 9:05 AM EDT
Get Alerts FOSL Hot Sheet
Price: $1.02 +5.15%

Rating Summary:
    3 Buy, 11 Hold, 10 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Sterne Agee analyst Ike Boruchow weighed in on Fossil (NASDAQ: FOSL) following the Apple Watch announcement, saying it is time to take the smartwatch threat seriously.

"The introduction of the Apple Watch presents incremental risk to owning FOSL shares," Boruchow commented. "Although the potential size of the smartwatch market remains unclear, Apple's product could present a serious disruption to the traditional fashion watch market (and FOSL's ~30% share). In this report, we illustrate quantitatively the potential sales and EPS impact on FOSL from the smartwatch market disruption. We would continue to avoid FOSL shares until we receive greater clarity surrounding the risk"

On the specific financial impact, he notes: "Using insights gleaned from a survey of over 500 U.S. consumers, we attempted to quantify the smartwatch risk to FOSL’s results. We estimate that by 2016 FOSL's sales could potentially be affected by $250-$300 million in revenue (or ~$1.00+ in EPS).

The firm maintained a Neutral rating and price target of $105.00

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

Shares of Fossil closed at $102.92 yesterday.



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