Garmin Downgraded to “Underperform” at Bank of America/Merrill Lynch (GRMN)


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GPS maker Garmin Ltd. ( GRMN ) saw its rating and price target cut on Friday by analysts at Bank of America/Merrill Lynch.

The firm cut its rating on GRMN from "Buy" to "Underperform," and lowered its price target from $43 to $26. That new target represents a potential 13% downside to the stock's Thursday closing price of $29.80.

Bank of America/Merrill Lynch cited weak consumer spending and increased competition from smartphones, most of which now include built-in GPS systems.

Garmin shares fell $1.41, or -4.7%, in premarket trading Friday.

The Bottom Line
We have been avoiding shares of GRMN since our early June 2008 coverage began, when the stock was trading at $51.34. The company has a 5.03% dividend yield, based on last night's closing stock price of $29.80. The stock has technical support in the $24-$27 price area. If the shares can firm up, we see overhead resistance around the $34 price level. We would remain on the sidelines for now.

Garmin Ltd. ( GRMN ) is not recommended at this time, holding a DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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