Story updated at 10 a.m. to reflect market activity.
Shares of Garmin gained 3.1% to $56.21 in morning trading.
The bank set a price target of $65 for the GPS navigation system maker. Demand for wearable devices should help boost the company's growth according to analysts.
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Separately, TheStreet Ratings team rates GARMIN LTD as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GARMIN LTD (GRMN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 25.75% and other important driving factors, this stock has surged by 63.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GRMN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- GRMN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GRMN has a quick ratio of 2.24, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for GARMIN LTD is rather high; currently it is at 53.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.53% significantly outperformed against the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market on the basis of return on equity, GARMIN LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- GARMIN LTD has improved earnings per share by 25.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GARMIN LTD increased its bottom line by earning $3.12 versus $2.77 in the prior year. For the next year, the market is expecting a contraction of 17.6% in earnings ($2.57 versus $3.12).
- You can view the full analysis from the report here: GRMN Ratings Report