NEW YORK (TheStreet) -- Shares of Fitbit (FIT) were rising in early-afternoon trading on Tuesday as Morgan Stanleyanalysts said they're bullish on the stock based on the Charge 2 and Flex 2 watch releases yesterday.
The firm reiterated its "overweight" rating and $31 price target, but predicts the wearables company will have a successful holiday season and report "strong" fourth quarter results, according to TheFly.
Fitbit launched two new models yesterday, the Charge 2 and the Flex 2. The Charge 2 has a larger display, exercise-specific tracking and an improved reminder system, among other features.
The Flex 2 is a slimmer, waterproof wearable that includes a removable tracker.
Morgan Stanley said the company's expanded line of accessories should increase its revenue per device and margins over time. The newer features make the watches feel more personalized, which encourages user engagement and retention levels, the firm added in their analyst note, TheFly reports.
Additionally, Goldman Sachs analysts said today the new products will ramp up pressure on Garmin (GRMN), who also makes fitness trackers.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates Fitbit as a Sell with a ratings score of D. This is driven by multiple weaknesses, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks the team covers. Among the areas it feels are negative, one of the most important has been unimpressive growth in net income over time.
You can view the full analysis from the report here:
FIT data by YCharts