Analyst Note| Julie Bhusal Sharma |
Narrow-moat Garmin delivered solid first-quarter results with four of five business segments experiencing double-digit growth. We are slightly raising our fair value estimate to $98 and continue to view shares as overvalued. Pandemic-induced tailwinds catapulted Garmin through 2020 as demand for its marine, fitness, and outdoor segments unsurprisingly grew. As the pandemic begins to subside, the demand landscape for Garmin’s isolation-friendly segments has seen little change. Based on conversations with customers and partners, management views the lifestyle changes benefiting its business to be durable and long term. We view the tailwind optimism as appropriate, but due to macroeconomic factors affecting electronic components supply globally, management has cautiously maintained its Feb. 17 issued guidance.