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Goldman Removes GoPro From Sell List Ahead Of Product Launch

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Goldman Removes GoPro From Sell List Ahead Of Product Launch

Analysts at Goldman Sachs no longer hold a bearish view on GoPro Inc (NASDAQ: GPRO) as the upcoming launch of its HERO6 camera could prove to be a catalyst for the stock. The firm's Doug Clark upgrades GoPro's stock from Sell to Neutral with a price target boosted from $6.75 to $10.

From a historical standpoint the launch of a new camera has been a positive catalyst as GoPro's stock outperformed the S&P 500 index into and out of product launches, Clark argued. But this time around, the company will follow up with its 360-degree Fusion camera into 2018 and will also enter the high-end AR/VR device capture market.

Nevertheless, the analyst isn't ready to declare GoPro's stock an outright buy as the challenges the company faced in the past remain in place. Specifically, camera sell-through was down 9 percent year-over-year in the second quarter and likely declined in five of the past six quarters — which implies it is operating in a saturated market that is also stiff in competition.

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On the other hand, GoPro should return to cash generation in the back half of 2017, which represents another reason to no longer hold a bearish stance.

Finally, a $10 price target is based on a 1.0x multiple on 2018 sales, which is up from a prior estimate of 0.6x. The revised multiple is based on GoPro's improved costs and margins and balance sheet stability.

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Latest Ratings for GPRO

DateFirmActionFromTo
Sep 2018UpgradesPerformOutperform
May 2018MaintainsNeutralNeutral
Mar 2018MaintainsNeutralNeutral

View More Analyst Ratings for GPRO
View the Latest Analyst Ratings

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