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On Thursday, BofA Securities analyst Ronald Epstein revised the price target for Garmin Ltd . (NYSE:GRMN) stock, reducing it to $175 from a previous $185, while retaining an Underperform rating on the shares. Currently trading at $218.07 with a market capitalization of $42 billion, Garmin shows strong financial health but appears overvalued according to InvestingPro analysis. Epstein’s assessment of Garmin as a high-quality, well-run company in niche markets remains steady. However, the adjustment in price target follows a realignment of estimates, which now reflects a more conservative outlook on the company’s growth potential.
Garmin recently reported a fourth quarter adjusted EPS of $2.41, surpassing the consensus by approximately 22%, which aligned with BofA Securities’ estimates. The company maintains impressive gross profit margins of 58.7% and has achieved revenue growth of 20.44% over the last twelve months. Despite this performance, the firm has reduced its 2025 adjusted EPS forecast for Garmin from $9.15 to $8.55. This new estimate still suggests a stronger growth in the Fitness and Outdoors segments than the consensus estimate of $7.95.
The revision in Garmin’s price target and earnings forecast is influenced by the anticipation of sales deceleration in the first half of 2025 due to current macroeconomic uncertainties. BofA Securities also expects that the slowing consumer cycle will likely restrict the addition of new buyers during this period. For deeper insights into Garmin’s financial health and growth prospects, InvestingPro subscribers can access 15+ additional ProTips and comprehensive valuation metrics.
The updated price objective of $175 is derived from a valuation of 1.0 times the P/E ratio relative to the S&P 500 based on the firm’s 2026 earnings projections, which remains unchanged. Epstein’s commentary underscores a cautious stance on Garmin’s stock, suggesting that the market’s current valuation does not fully align with the company’s growth prospects.
In other recent news, Garmin Ltd. reported a record-breaking fourth quarter and full-year 2024, with a 23% year-over-year increase in Q4 revenue, reaching $1.82 billion. This growth was driven by strong sales in smart wearables and adventure watches, with fitness and outdoor sales both rising by 31%. The aviation segment saw a 9% increase in sales, while the auto OEM segment experienced a 30% year-over-year growth. Additionally, Garmin announced the selection of its G3000 PRIME integrated flight deck by Pilatus Aircraft Ltd for military training aircraft, marking its first foray into this market. The company also revealed a partnership with Clippd to integrate golf data from its smartwatches into Clippd’s platform, enhancing game improvement strategies for golfers. Garmin is collaborating with Harvard University and the University of Oxford on a study linking sleep and exercise to happiness, using data from its smartwatches. Furthermore, Garmin plans to retrofit Airbus H130 helicopters with its GFC 600H Helicopter Flight Control System, expected to enhance safety and mission effectiveness. Lastly, Tigress Financial Partners raised Garmin’s stock target to $285, maintaining a Strong Buy rating, citing continuous innovation and new product development as key drivers.
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