It seems like Black Friday price cuts on Garmin and TomTom GPS units have given some financial analysts reason to worry. Analysts from Wedbush Morgan and Deutsche Bank both brought down their targets for Garmin’s stock price, sending it crashing down a full 9% at market close yesterday. As of last night it was sitting at $15.48.
Wedbush Morgan analyst Scott Sutherland cuts his share target price to $10 from $26, and his 2008 earning per share expectations to $3.63 from $3.72. Falling PND prices and a competitive landscape veering toward mobile phones were the reasons for his cuts, though he maintains a Hold rating on the stock.
Jonathan Goldberg from Deutsche Bank cut his Garmin target price to $14 from $18 and TomTom to 3.50 Euros from 4 Euros. His checks with over 100 electronics retailers on Black Friday revealed an average PND price drop of over 35% from 2007. He’s also seeing consumers trend toward lower-end devices rather than feature-rich devices with higher profit margins. His advice: Sell any Garmin and TomTom stock you have.
Just imagine what will happen if Garmin’s nuviphone receives another delay.
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