Garmin Prospects Rise

Morgan Stanley raised fiscal-year 2005 estimated revenue forecast for Garmin [GRMN] to $900 million from $830 million and EPS (earnings per share) to $2.18 from $2.04 due to stronger than expected demand across multiple product segments.

Factoring in zero automotive OEM revenue to the navigation equipment developer’s long-term estimates means that the company could have more upside, thus justifying a higher multiple, wrote Benjamin Swinburne, a Morgan Stanley satellite analyst. Automotive, marine and aviation product strength likely will manifest itself in above-consensus second-half 2004 and 2005 estimated revenues and possibly EPS, Swinburne explained to his clients. Upward revisions from Wall Street are likely, he added. However, long-term opportunities at Garmin are offset somewhat by likely margin pressure and increasing competition.

(Benjamin Swinburne, Morgan Stanley, 212/761-7527)