Garmin Set to Report Q3 Earnings Amid Mixed Analyst Sentiment
Company Forecasts Profit Growth as Market Performance Shines
With a market cap of $31 billion, Garmin Ltd. (GRMN) is recognized for designing, manufacturing, and marketing a variety of wireless devices. The company is especially known for its cutting-edge GPS-enabled technology across various sectors, such as sports and fitness, outdoor recreation, marine, automotive, and aviation. Garmin, headquartered in Schaffhausen, Switzerland, will announce its fiscal Q3 earnings before the market opens on Wednesday, Oct. 30.
Ahead of this earnings report, analysts forecast that Garmin will report a profit of $1.46 per share, reflecting an increase of nearly 3.6% from $1.41 per share in the same quarter last year. The company has notably exceeded Wall Street’s earnings expectations in the past four quarters. In Q2, Garmin’s adjusted EPS of $1.58 surpassed consensus estimates by 12.9% and rose 9% from the previous year, thanks largely to strong revenue growth in its fitness, marine, and automotive divisions.
Looking ahead to fiscal 2024, analysts anticipate an EPS of $6.08 for GRMN, signifying an 8.8% rise from $5.59 reported in fiscal 2023. Forecasts indicate an even larger increase to $6.63, or a 9.1% uplift, by fiscal 2025.
On a year-to-date basis, GRMN shares have gained 25.7%, surpassing the S&P 500 Index’s ($SPX) increase of 21.5% and the Technology Select Sector SPDR Fund’s (XLK) return of 18.7% during the same period.
However, the stock faced some challenges recently. On September 13, Barclays downgraded Garmin shares from “equal weight” to “underweight,” cutting its price target from $181 to $133. This announcement negatively impacted investor sentiment, resulting in a 5.5% drop in share prices.
Moreover, despite reporting stronger-than-expected earnings for Q2 on July 31, shares fell 4.5%. Garmin announced revenues of $1.5 billion, marking a 14% increase from the previous year. Operating income rose to $342 million, reflecting a 20% annual gain. Challenges arose from a 2% decline in revenues from the outdoor segment, which impacted sales of adventure watches, as well as stagnant revenue in aviation and a 10% rise in operating expenses.
The overall consensus among analysts regarding Garmin’s stock is cautious, reflected in the current “Hold” rating. Out of six analysts, one favors a “Strong Buy,” two recommend a “Hold,” one suggests a “Moderate Sell,” and two lean toward a “Strong Sell,” showing a shift from three months ago when there were no “Strong Sell” recommendations.
The average price target set by analysts for GRMN is $164.40, indicating a potential upside of nearly 1.7% based on current trading levels.
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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 are solely for informational purposes. For more information, please view the Barchart Disclosure Policy
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