Citi Warns Of Rising Disruption Risks From Drones, Cuts GoPro Estimates

In a note published Wednesday, Citigroup analyst Jeremy David lowered his expected total return for GoPro Inc GPRO to -4.6 percent, maintaining a Neutral rating on the company.

David cites Citigroup's annual U.S. action camera survey, saying that fewer American consumers are planning to buy a GoPro over the next 12 months than did so in the past year.

He also said that end-market trackers such as YouTube, product review, and app downloads indicate softer domestic demand for the cameras, "leaving international demand as the key driver."

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According to the bank's survey, consumer awareness of GoPro is at an all-time high (72 percent), but exposure to the brand is less likely to drive purchases now than it has been in the past. In addition, "fewer respondents are describing the content as being ‘appealing.'"

David also worries that the drone market is pulling away some of GoPro's core customer base: photo and video enthusiasts and action sports junkies. He believes that a fast-growing drone industry would spell a high risk of a slowdown for the camera company. Furthermore, he doesn't see much of a future for the firm in virtual reality technology, which he instead sees being dominated by non-GoPro devices.

Shares of GoPro were trading down more than 3 percent in Wednesday's pre-market session. Shares are down 7 percent year-to-date.