Garmin (GRMN) shares are trading higher after Goldman Sachs analyst Thomas Lee this morning raised his rating on the stock to Neutral from Sell, with a new price target of $29, up from $28.
“We believe our structural concerns around the personal navigation device market are now well understood and largely priced in to the shares,” he writes in a research note. “While there is no change to our fundamental view that the PND market is in secular decline, we think that view is no longer out of consensus, in particular following recent comments from the company on the cannibalistic impact from smart phones to PNDs.”
Lee contends downside is limited from here, as the market ascribes “very little value” to the company’s PND business. He also sees some potential catalysts for the stock ahead, including the likely decision to exit the smart phone business, which he says could boost profits by as much as 30 cents a share. He also thinks there could be stock repurchases, dividend increases or other capital structure changes.
GRMN is up $1, or 3.4%, to $30.64.
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