Garmin Shares Rebound After Analyst Says Fears of Nokia-Navteq Are Overblown
From Staff Reports
Shares of personal navigation device maker Garmin Ltd. (GRMN) bounced back after a rocky two days Thursday, after a Deutsche Bank AG (DB) analyst said the sale of Navteq Corp. (NVT), which provides Garmin with map data, is not a threat to Garmin’s business.
The analyst, Jonathan Goldberg, maintained his "Buy" rating and $125 price target on Garmin’s shares and said the Cayman Islands-based company will find a way to compete – even with the $8.1 billion Nokia Corp. (NOK) purchase of Navteq. It might have to make a run of its own for Navteq, bid for Navteq industry rival Tele Atlas NV, build a mapping network of its own, or just deal with Navteq through Nokia.
The Finland-based Nokia is the world’s No. 1 cell phone company.
Goldberg said all four options are acceptable, because Garmin has contracts with Navteq through 2009. Besides, Garmin is Navteq’s No. 1 customer, and Nokia may want to keep that revenue stream, Goldberg contends.
Garmin’s shares jumped $4.43 each, or 4.59%, yesterday to close at $100.95. The shares are down about 20% since Monday, when the Nokia-Navteq deal was announced.
News and Related Story Links:
- Money Morning News Analysis:
Savaged Garmin Battles Back With Cell Phone Navigation Software. - Forbes.com:
Garmin Rebounds. - Money Morning News:
Nokia Announces $8.1 Billion Acquisition of Navteq. - Information Week:
Garmin’s New Device Turns Smart Phones into GPS Devices.