Garmin Ltd.: 2Q26 Review: Strong Fitness Momentum Lifts Estimates; However, Memory Costs Continue to Loom in 2H26 and Beyond

研报英文原文证据摘录

Garmin Ltd.: 2Q26 Review: Strong Fitness Momentum Lifts Estimates; However, Memory Costs Continue to Loom in 2H26 and Beyond

ssure

Prev Cur Δ

in a rising inflationary environment, with management attributing the bulk of the Adj. EPS - 26E ($) 9.75 10.05 3.1%

strength to favorable product mix alongside the benefits of vertical integration and

scale. Here, too, however, management is guiding for pressure to mount on gross Quarterly Forecasts (FYE Dec)

margins as strategic inventory of lower-cost memory is drawn down and higher Adj. EPS ($)

memory costs begin flowing through in the back half. This will be a critical watch 2025A 2026E 2027E

Q1 1.61 2.08A 1.88

point for how effectively management can leverage its playbook around pricing, Q2 2.17 2.81A 2.61

cost, and mix, particularly with the lower-cost inventory buffer depleting, and the Q3 1.99 2.39 2.66

setup appearing incrementally tougher heading into 2H26 and, by extension, into Q4 2.79 2.77 3.35

FY 8.56 10.05 10.50

2027 as safety stock is digested. On that note, we are modestly raising our revenue

and earnings forecasts on the 2Q26 results and improved outlook, led by Fitness; Style Exposure

however, our out-year estimates rise to a lesser degree as we embed gross margin

pressure materializing later in the cycle amid a rising inflationary and component-

cost environment. Consistent with the higher near-term estimates, we are nudging

up our December 2027 price target modestly to $295, which implies more limited

upside from current levels.

• 2Q26 Results: Robust earnings beat led by continued momentum in

Fitness and strong margins. Revenue tracked to $2.02 bn (vs. JPMe of $1.90

bn and consensus of $1.92 bn), led by a strong performance in Fitness and

boosted by a one-time $21 mn tariff rebate.