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Valued at a market cap of $31 billion, Garmin Ltd. (GRMN) designs, manufactures, and markets a range of wireless devices and is renowned for delivering innovative GPS-enabled technology across diverse markets, including sports and fitness, outdoor recreation, marine, automotive, and aviation. The Schaffhausen, Switzerland-based company is expected to announce its fiscal Q3 earnings results before the market opens on Wednesday, Oct. 30.
Ahead of this event, analysts expect the tech company to report a profit of $1.46 per share, up nearly 3.6% from $1.41 per share in the year-ago quarter. The company has consistently beaten Wall Street's bottom-line estimates in the last four quarters. In Q2, the company’s adjusted EPS of $1.58 outpaced the consensus estimates by 12.9% and increased by 9% from a year ago. The outperformance was primarily driven by robust growth in revenues from its fitness, marine, and automotive segments.
For fiscal 2024, analysts expect GRMN to report an EPS of $6.08, up 8.8% from $5.59 in fiscal 2023. Moreover, EPS is expected to increase almost 9.1% year-over-year to $6.63 in fiscal 2025.
Shares of GRMN have rallied 25.7% on a YTD basis, outperforming both the S&P 500 Index's ($SPX) 21.5% rise and the Technology Select Sector SPDR Fund’s (XLK) 18.7% return over the same period.
On Sep. 13, investment bank Barclays downgraded shares of Garmin from “equal weight” to “underweight” and cut its share price target from its previous $181 to $133. The news triggered investor sentiments and led to a 5.5% drop in its share price.
Moreover, despite reporting better-than-expected Q2 earnings results on Jul. 31, shares of GRMN plunged 4.5%. Its revenue of $1.5 billion increased 14% from a year ago, and its operating income of $342 million climbed 20% on a yearly basis. However, a 2% year-over-year fall in revenue from the outdoor segment due to declines in adventure watches, relatively flat revenue from the aviation segment coupled with a 10% annual increase in operating expenses might have dampened investor confidence.
Analysts' consensus view on Garmin’s stock is cautious, with a "Hold" rating overall. Among six analysts covering the stock, one recommends a "Strong Buy," two suggest a "Hold," one indicates a “Moderate Sell,” and two recommend a “Strong Sell.” This configuration is less bullish than three months ago, with not a single analyst suggesting a "Strong Sell."
The average analyst price target for GRMN is $164.40, indicating a nearly 1.7% potential upside from the current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
