In a note released Wednesday morning Morgan Stanley analyst James Faucette initiated coverage on Garmin (NASDAQ: GRMN) with an Underweight rating and announced a $52 price target.
Faucette began, "Continued success is priced into the stock and we see little potential for upside."
Although Faucette is forecasting above consensus EPS growth based on better performance in marine and automotive, he believes this still does not justify the current share price. He expects the multiple to contract to 10 times expected calendar year 2015 EV/EBITDA.
Looking forward, Faucette believes it is likely Garmin will suffer margin pressure due to increased competition as companies like Apple and Google enter the wearables market.
Following the release of this note, shares of Garmin are trading down ~2 percent in the pre-market session.
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