GRMN – Given management’s confidence in their Fenix series and expanding wearables business, bearish market expectations are unwarranted, and upside is likely

• Garmin Ltd (GRMN:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.3x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, which is unwarranted given management’s confidence in their Fenix watch series margin and growth potential, and in their ability to expand their wearables business. As such, outperformance is likely justified
• Specifically, management is confident that the new Fenix 5 plus series has a strong margin profile, and that the Fenix is a growth driver in their APAC markets. Additionally, they are confident in their ability to selectively increase qualified retailers in their wearables business