Garmin: RBC Upgrades; Morgan Keegan Cuts Numbers

RBC Capital’s Mark Sue this morning upped his rating on Garmin (GRMN) to Sector Perform from Underperform, noting that the stock as of Friday’s close was down about 75% from its 52-week peak. Sue says the GPS device maker “has much work cut our for itself as it wrestles with weak demand, price competition and diminishing opportunities for its Nuvifone.” But he says the stock is now trading at just 3.5x his ‘09 EPS estimate ex cash of $4.09 a share, noting that Garmin is debt free and continues to generate “good cash from operations.” Sue says the personal navigation device market is likely to see “subdued growth continued pricing pressure,” but that Garmin “seems to be holding share and is increasing efforts to reduce input costs.” Sue also expects the company to unveil three versions of the Nuvifone at next month’s Mobile World Congress in Barcelona. Sue is expecting earnings of $1.04 for Q4 and $3.80 a share for 2009. ... (link)