On Monday, Tigress Financial Partners showed continued optimism for Garmin Ltd . (NYSE:GRMN) as the firm increased its price target to $265 and sustained a Strong Buy rating on the stock. The firm's confidence is bolstered by Garmin's consistent innovation, new product launches, and operational efficiency, which Tigress believes will continue to drive revenue growth, enhance cash flow, and create further value for shareholders.
According to InvestingPro data, Garmin's impressive 70.49% year-to-date return and "GREAT" financial health score validate this optimistic outlook. The company maintains a robust balance sheet with more cash than debt, while consistently returning value to shareholders through 22 consecutive years of dividend payments.
Garmin's impressive financial performance in the third quarter of 2024 underpins Tigress's positive outlook. The company reported a 24% year-over-year increase in revenue, reaching a record $1.59 billion. Fitness segment revenues surged by 31% to $463.89 million, spurred by strong demand for wearable technology.
The outdoor segment also showed robust growth, with a 21% increase in revenue to $526.55 million, largely attributed to the success of adventure watches. This growth contributes to Garmin's strong overall revenue growth of 17.91% over the last twelve months, with InvestingPro analysis showing seven analysts have revised their earnings upward for the upcoming period.
The aviation and marine segments of Garmin's business have also contributed to the company's growth. Aviation revenue saw a 3% increase to $204.63 million, thanks to a strong performance in aftermarket products. Marine revenue jumped 22% to $222.24 million, driven by the strategic acquisition of JL Audio. Additionally, Garmin recently announced the purchase of Lumishore, a leading marine LED lighting manufacturer, which is expected to enhance its product offerings and integration capabilities.
The company's automotive original equipment manufacturer (OEM) revenue witnessed a significant 53% increase to $168.71 million. This growth was propelled by the successful launch of Garmin-designed domain controllers across all BMW (ETR:BMWG) Group car lines. Garmin continues to expand its satellite-connected device offerings, including the recent launch of the InReach Messenger Plus, which introduces photo and voice messaging features. These subscription-based services are anticipated to further grow the company's recurring revenue streams.
Tigress Financial Partners justifies Garmin's premium valuation with its range of high-quality products, strong brand equity, and appeal to affluent consumers engaged in activities like aviation, boating, fitness, and outdoor pursuits.
The firm notes Garmin's resilience in economic terms, robust balance sheet, and healthy cash flow as drivers for ongoing investment in product development, which is expected to yield higher returns on capital and economic profit, thus enhancing shareholder value. Supporting this view, InvestingPro data reveals a strong return on invested capital of 18% and an impressive current ratio of 3.3, indicating excellent operational efficiency and financial stability.
For deeper insights into Garmin's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. Tigress also points to Garmin's commitment to shareholder returns through dividend increases and share repurchases. The new 12-month price target of $265, combined with dividends, is projected to offer a total return potential of approximately 25% from current levels.
In other recent news, Garmin Ltd. has been making significant strides in its financial performance. The company recently posted record-breaking third-quarter results for 2024, showing a 24% increase in consolidated revenue to $1.59 billion. This strong performance led to a gross margin expansion to 60% and a 62% year-over-year increase in operating income. Garmin also raised its full-year guidance to approximately $6.12 billion in revenue and a pro forma EPS of $6.85.
BofA Securities maintained its Underperform rating on Garmin's stock, despite acknowledging the company's recent performance and updated earnings projections. The firm increased the price target to $185 from the previous $150, based on a price-to-earnings ratio of 1.0 times relative to the S&P 500 projections for 2026.
On the other hand, JPMorgan (NYSE:JPM) raised its price target for Garmin from $178 to $212, while maintaining a neutral rating on the stock. This adjustment was in response to Garmin's robust earnings beat and raised full-year guidance that exceeded expectations. JPMorgan's revised earnings outlook for Garmin is now $7.60 per share in 2025, up from the previous estimate of $6.55, and $8.50 per share in 2026, increased from $7.30.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.