Morgan Stanley upgraded Garmin to Equal-weight from Underweight, citing a stronger 2026 outlook with firmer growth and more stable margins than previously expected. The firm set a new $252 price target based on 24x its 2027 earnings per share estimate of $10.49, noting the valuation is broadly in line with historical averages.

Garmin guided to 9% revenue growth in 2026, or about $7.9 billion, while Morgan Stanley now forecasts 12% year-over-year revenue growth and 11% EPS growth. The brokerage said the guidance appears conservative, citing historical seasonality, potential earlier product launches in the Outdoor segment, and Garmin's record of exceeding initial revenue targets. On margins, Garmin guided to a 58.5% gross margin in 2026, down 20 basis points year-over-year.

The bank expects product mix to offset potential weakness in Outdoor and Fitness segments, with Marine, Auto OEM, and Aviation margins seen stable. Morgan Stanley noted Garmin built raw materials inventory ahead of a memory cost upcycle, limiting risk from higher component prices. The firm sees operating margin reaching Garmin's 25.5% target in 2026, with any revenue upside likely flowing to earnings.