Navigation and communication equipment manufacturer Garmin (NYSE: GRMN) is benefiting from the expansion of its product portfolio and demand for its products.
The GRMN stock price has increased 10.9% over the past 12 months.
Moreover, it is an attractive stock for investors, given its history of consistent dividends. The Garmin dividend amount has consistently increased over the past 5 years.
Continued Traction in Aviation and Marine
The company’s Aviation and Marine segments are witnessing an upside provided by the pandemic. A surge in interest in boating, as well as increased investments in this business, is expected to keep up the momentum.
Deutsche Bank analyst Jeffrey Rand thinks that the Aviation segment might continue with a moderate growth rate driven by demand trends led by the pandemic. Importantly, higher adoption of private jets and helicopters are expected to be the longer-term sustained growth driver.
Expanding Product Roster, a Positive
Continued introduction of new products for its Outdoor business is boding well for the company. Notably, the pandemic-led increase in indoor fitness activities like cycling gave a boost to the business.
Interestingly, the Outdoor segment continued its growth throughout 2021 despite it not launching its new fēnix 7 family of smartwatches last year as anticipated.
Nonetheless, fēnix 7 is expected to launch in early 2022, along with new models of the Epix, instinct, Venu, and vivomove smartwatches. Rand seemed particularly positive about the fēnix 7 and believes that the long wait for a model upgrade might result in pent-up demand, driving sales.
Expert Confident
The analyst upgraded Garmin to Buy from Hold. Moreover, his GRMN price target was also raised to $160 from $148. He believes that “the high-quality nature of GRMN financials and business model in a volatile macro, and a recent pull-back in its stock-price make the risk-reward attractive at current levels.”
Entering the new calendar year with strong fundamentals, Rand is confident that the company’s integrated business model will help it effectively manage its supply chain.
Wall Street Modestly Upbeat
While two other Wall Street analysts covering the Garmin stock analysis share Rand’s optimistic stance, two analysts are more cautious, making the consensus rating a Moderate Buy.
The average Garmin price target is $167.60, suggesting an upside of 27.2% from current levels.
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Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
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