Citi: Garmin Still A Sell

In a report published Wednesday, Citi analysts maintained a Sell rating on

, with a price target of $42. Garmin is likely to report its 1Q results short of expectations. Delayed availability of the vivoactive and vivofit 2 at retail and the product cycle at the leading activity tracker OEM are downside risks leading to a 1Q15 miss. "We are modeling Q1 revenue of $591M, $15M below Street of $606M, up 1% y/y, and EPS of $0.50, $0.08 below Street of $0.58," the analysts stated. Lower momentum in the activity tracker market in 1Q15 and higher operating expenses may push the company's operating margins below the street expectations. Also Garmin's stronghold in the GPS fitness watches segment is likely to be eroded by competitive pressures and further share gains in activity trackers appear difficult to achieve. "Apple, TomTom and the leading activity tracker OEM are increasingly targeting runners, ultimately reducing GRMN's ~75% share," the analysts mentioned. The analysts believe that it is too early for the company to reduce its 2015 guidance despite a likely weak 1Q and strong forex headwinds. "This likely happens on the Q2 earnings call," the analysts added.