Barclays’ Joseph Wolf said that value stocks in the US emerging technologies sector are more attractive than growth stocks. Referring to GoPro Inc GPRO, the analyst mentioned that 2016 could be “a pivotal year” for the company. The company’s shares have lost 65 percent in the past six months and “the retail euphoria that drove the stock up post-IPO has waned.”
“The GPRO quadcopter (recently named Karma) is still on schedule to be released sometime in 1H16 and is a natural extension for GPRO given the company’s customer base and distribution channels,” Wolf commented. He added that software and virtual reality are likely to increase the value proposition of owning the company’s shares.
GoPro continues with a high R&D investment, and more features like Trim and Share may be released this year. If the company is able to execute on its initiatives in 2016 and the Karma launch is successful, there could be upside to GoPro’s shares, Wolf said.
Wolf maintained an Overweight rating for the company, while reducing the price target from $40 to $25. The EPS estimates for 2016 and 2017 have been reduced from $1.86 to $1.19 and from $2.36 to $1.49, respectively.
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