Garmin Downgraded as Cell Phones Get GPS

Goldman Sachs analyst Thomas Lee Tuesday morning reduced his rating on Garmin (GRMN) to Sell from Neutral, cutting his target price to $15, from $21. The stock was added to Goldman’s “Americas Conviction Sell List.”

Lee contends 2009 will be the start of a “multi-year secular decline in Garmin’s core-end market,” personal navigation devices. A key issue: the increased availability of GPS functionality in mobile phones.

“We believe the current economic slowdown plus increased smartphone GPS usage and limited diversification options will drive material rev/EPS decline over the next several years,” he writes. “While the shares look attractively valued, we believe trough multiples are likely to see lower levels given the structural changes.”

Lee cut his 2008 EPS estimate to $3.24, from $3.39; for 2009, he goes to $2.07, from $2.45; for 2010, he now sees $1.74, down from $2.33.

GRMN Tuesday is down $1.41, or 6.4%, to $20.59.

Comments

[freefall51:]

Reminds me that Transocean was on the conviction buy list when the price was an all time high. Wonder if the cellphones can emulate the voice of the nice lady that sits inside the Garmin box.

Jan 06 10:16 PM

[freefall51:]

Reminds me that Transocean was on the conviction buy list when the price was an all time high. Wonder if the cellphones can emulate the voice of the nice lady that sits inside the Garmin box.

Jan 06 10:16 PM

[freefall51:]

Reminds me that Transocean was on the conviction buy list when the price was an all time high. Wonder if the cellphones can emulate the voice of the nice lady that sits inside the Garmin box.

Jan 06 10:16 PM