Garmin May Have to Deal With Gremlins

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Word Count: 529 | Companies Featured in This Article: Garmin, Garmin, Navteq, Gentex

Garmin (GRMN: Nasdaq) By Banc of America Securities ($77.66, July 9, 2007)

WE ARE INITIATING COVERAGE of Garmin with a Neutral rating and $84 price target.

We like the global portable navigation device (PND) penetration story and Garmin's market position, but think roughly four times price-volume elasticity in the U.S. is discounted in the stock compared to the 4.5 times we have modeled. The latter equates to 110% PND unit compounded annual growth rate over the next three years and brings U.S. penetration to 35% from 5%.

While there could be upside to our 4.5 times elasticity and related figures, ...