Garmin Bounces Back, Fossil Continues Slide After Apple Watch Unveiled

NEW YORK (TheStreet) -- Shares of Garmin (GRMN) , which makes bands for fitness tracking, are rising after two analysts issued upbeat notes on the stock today. The analysts were defending the shares after they fell yesterday following the launch of Apple's (AAPL) Apple Watch, which also has features geared to fitness enthusiasts. Meanwhile, two other analysts were split on the impact of the Apple Watch on watch maker Fossil  (FOSL) .

GARMIN: Apple Watch is not "a category killer" in the running or fitness band markets, as the device has several disadvantages, Oppenheimer analyst Yair Reiner wrote in a note to investors today. Specifically, the Apple Watch must be paired with an iPhone and most joggers don't run with their phones, Reiner stated. Additionally, the device's built-in optical heart rate sensor is likely prone to malfunction when exposed to water and sweat, the analyst believes. Runners are likely to continue to favor strap-on chest sensors to measure their heart rates, according to Reiner, who indicated that such sensors are supported by Garmin's devices but do not appear to be compatible with the Apple Watch. Furthermore Apple Watch costs $350, versus $130 to $170 for Garmin's products, and the Apple Watch's battery life is much shorter, according to Reiner, who added that Garmin is "heaving a slight sigh of relief." Citigroup analyst Jeremy David, meanwhile, wrote that the Apple Watch does not compete with Garmin's trackers. Apple Watch must be paired with iPhones to accurately measure distance, while its price is high, David stated. Additionally, the device's battery life appears to be well below that offered by Garmin's devices, according to the analyst, who kept a $70 price target and Buy rating on Garmin.

FOSSIL: Two analysts had different outlooks on Fossil in notes to investors today. Watches from Apple and Fossil can co-exist as they fill different needs, Jefferies analyst Randal Konik contended. Fossil's watches are more suitable for formal affairs than the "clunkier, sportier" Apple Watch, he believes. The Apple Watch will triumph in the health and payment categories, and perhaps in the "sporty daytime fashion" category, but Fossil will remain a "classic, timeless accessory," the analyst predicted. Fossil currently trades below its historical valuation, making its risk/reward ratio attractive, wrote Konik, who kept a $140 price target and Buy rating on the stock. Conversely, Sterne Agee analyst Ike Boruchow wrote that the Apple Watch increases the risk posed to Fossil's stock. Apple's product "could present a serious disruption" to Fossil's sales in the traditional fashion watch market, according to the analyst. After conducting a survey of over 500 U.S. consumers, Boruchow believes that the Apple Watch could reduce Fossil's 2016 earnings per share by $1+. He recommended avoiding Fossil's stock and kept a Neutral rating on the shares.

PRICE ACTION: In late morning trading, Garmin rose 2.8% to $53.14 and Fossil slipped 0.6% to $102.26. Another watch maker, Movado  (MOV) , was little changed after falling slightly yesterday.

Reporting by Larry Ramer.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

More from Investing

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

At End of May, Investors Signalling They May Stay Away

At End of May, Investors Signalling They May Stay Away

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever