An analyst from UBS set a new price target for Garmin (NYSE: GRMN) at $370. Garmin is a company that manufactures and sells GPS equipment and wearable technology for various markets, including fitness and aviation. When the target was set, Garmin's price was $301.94, suggesting a potential upside of approximately 22.54%.
This optimistic target follows a period of strong financial performance. For its second-quarter fiscal 2026, Garmin reported revenue of $2.02 billion, an 11% increase from the year before. The company's operating income, which is the profit made from its core business operations, surged by 30% to $616 million.
Further supporting this positive outlook, Garmin raised its guidance for the full year. The company now projects annual revenue of $8.05 billion and earnings per share (EPS) of $10.00. EPS is a key metric that shows how much profit a company makes for each share of its stock.
Despite the analyst's positive target, other valuation methods present a different view. A Discounted Cash Flow (DCF) analysis, as highlighted by GuruFocus, suggests Garmin is overvalued. The analysis estimated the company's intrinsic value at around $256, which is well below its recent price of about $307.
A DCF analysis is a valuation method used to estimate the value of an investment based on its expected future cash flows. The GuruFocus model used a 10-year earnings growth rate of 12.00% and a discount rate of 11% to calculate its valuation, indicating a negative margin of safety of nearly 20%.
