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Citi Cuts GoPro Target; Stays Positive On 2016 Product Launches

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Citi Cuts GoPro Target; Stays Positive On 2016 Product Launches
  • Shares of GoPro Inc (NASDAQ: GPRO) traded higher by more than 5 percent Tuesday despite Jeremy David of Citi lowering his price target to $75 from $90.
  • However, David maintained a Buy rating on the stock, noting the risk to reward profile is becoming "highly asymmetric."
  • David added that the stock could benefit next year from new product launches including HERO5 and a flying camera.

Shares of GoPro were trading higher by more than 5 percent Tuesday morning after Jeremy David of Citi maintained a Buy rating on the stock with a price target lowered to $75 from a previous $90.

Investors and traders appear to be bullish on the stock as the analyst's price target still implies an expected return of nearly 150 percent. The bullish nod was also well received following a downgrade by Piper Jaffray to Neutral from Overweight on October 14 with a price target slashed to $25 from a previous $54.

David argued in his note that the risk to reward profile on GoPro is "highly asymmetric," especially heading into 2016 as the launch of new products (HERO5, a flying camera) are likely to be "positive catalysts for sentiment" and lead to upward earnings revisions from the Street.

In the meantime, GoPro will report its third quarter results on Wednesday October 28 after market close. The analyst is expecting the company to report revenue of $425 million (falling short of management's $430-$445 million guidance and the Street's consensus estimate of $433 million) and earn $0.27 per share (also short of the company's $0.29-$0.32 guidance and the Street's $0.29 estimate).

David added that he is expecting GoPro's management to discuss their views on market penetration, advertising, promotional activities, ad long-term pricing and margin targets. In addition, the analyst is looking for management to be "more forthcoming" with its product roadmap as investors "seem to have lost confidence" in its ability to innovate.

Latest Ratings for GPRO

DateFirmActionFromTo
Feb 2021Morgan StanleyMaintainsUnderweight
Dec 2020Morgan StanleyMaintainsUnderweight
Nov 2020Morgan StanleyMaintainsUnderweight

View More Analyst Ratings for GPRO
View the Latest Analyst Ratings

 

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