Garmin: Baird Cuts Rating; Cites Aviation Mkt Weakness

Baird analyst Reik Read this morning cut his rating on Garmin (GRMN) to Neutral from Outperform, with a price target of $20, a bit below yesterday’s close at $21.27. Read writes that the downgrade reflects weakness in the aviation market as well as increasing near-term costs for both the Nuviphone and increasing R&D. He cut his 2009 EPS estimate to $2.06 from $2.15; for 2010 he goes to $2.14, from $2.22. Read also notes that the stock has rallied 40% over the last two months. Read notes that aircraft manufacturers Cessna and Bombardier both recently reported “meaningfully lower orders,” and cut expectations for the business jet market. He points out that Garmin gets about 10% of revenues from its aviation segment, and that it has the company’s highest margins. GRMN today is off 5 cents, at $21.22. (link)