Garmin Earnings: Profits Slightly Miss Mark Amid Macro Uncertainty

Narrow-moat Garmin reported earnings with revenue broadly in line with FactSet consensus expectations; however, it slightly missed profitability forecasts. Garmin expects tariffs on its foreign-manufactured products sold in US markets, though temporary exemptions exist, and the benefits from international currency sales may partially offset the trade challenges. While management noted that it had not seen any material change in demand or pull-forward for their products, we expect a slight reduction in consumer demand and expect this to show in the quarters ahead. With shares down around 7% amid weak profitability and trade concerns, we maintain our fair value estimate of $198 per share and currently view the stock as fairly valued.