Logitech, Garmin mixed as Barclays starts coverage on consumer tech names
Kelly Sullivan

Garmin (NYSE:GRMN) and Logitech International (NASDAQ:LOGI) saw fractional moves on Wednesday, as Barclays started coverage on both companies, with the investment firm labeling Logitech as the "most underappreciated player in the space."
Logitech: Analyst Tim Long started Logitech (LOGI) with an overweight rating, putting it in a "leap frog" group, one that is able to accelerate and steepen the demand curve with new product categories and simplified network effects.
"Logitech has successfully transitioned from a mono-brand with PC dependency to a multi-brand and multi-category cloud peripherals company under the best of breed CEO Bracken Darrell," Long wrote in a note to clients, adding the company is a market leader in two-thirds of its 30 product categories.
Logitech (LOGI) is likely to keep benefiting as video conferencing and gaming continue to grow and the company's core Creativity & Productivity segment is "very profitable."
The analyst also noted that wireless gaming and video products have above average margins and Logitech (LOGI) has "tremendous" brand awareness and with recent tuck-in acquisitions and a strong and consistent capital return program, the stock is attractive at these levels.
Garmin: Garmin (GRMN), along with Apple (AAPL), are likely in the "pull forward" group of companies that benefited from COVID-19, on the likelihood they only saw a temporary spike in sales and demand, with levels now reverting to pre-COVID levels.
Long noted that Garmin (GRMN) is a consumer discretionary company and while its products are high-quality and high margin due to its continued investments in research and development in niche markets, competition is increasing, particularly from Apple's (AAPL) Watch Ultra.
"For Garmin, early checks indicate strong demand for the Apple Watch Ultra, which could pose a fundamental threat to GRMNâs flagship Fenix watch series in the medium to long run as the Apple Watch Ultra scales," Long explained.
The analyst added that "an outsized share buyback and balance sheet flexibility/bolt-on acquisitions" could help support the bull case, but they are unlikely to happen, at least in the near term. 
Garmin (GRMN) reported third-quarter results late last month and lowered its full-year guidance below analysts' estimates.