Analyst: Apple Watch May Not Be A Threat To Garmin After All

Garmin Ltd. (NASDAQ: GRMN) shares are getting hurt by the pending launch of the Apple Watch, but an analyst said a little more pessimism on the stock could make it attractive.

Switzerland-based Garmin, which makes navigation and information devices for both consumer and transportation markets, has seen its shares fall nearly 12 percent in the year to date. The company closed Friday at $46.66, up $0.07.

Pacific Crest's Brad Erickson reiterated a Neutral rating on Garmin and said specialty retailers have told him that Garmin's running watch sales will take a hit from the pending launch of Apple Inc. (NASDAQ: AAPL)'s competing device.

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But despite the jawboning, Erickson said those same retailers' sales numbers show no sign of a slowdown approaching Apple's release date.

"Garmin may be better insulated versus Apple than many people realize," Erickson said.

Also weighing on Garmin: Fitbit Inc.'s potential initial public offering. San Francisco-based Fitbit makes wearable gadgets that measure walking, sleeping and other "personal metrics."

Erickson called Garmin shares "fairly valued" and trimmed his price target slightly to $3.08 a share, citing foreign exchange pressure.

Should the shares drop lower, "at some point an investor could do a lot worse," Erickson said, citing Garmin's stable earnings, healthy yield and free cash flow.