Are They Lost? Tough Q4 Ahead for Garmin and TomTom

More risk remains for Garmin (GRMN) and TomTom (TOM2.AS), the two leading providers of personal navigation devices. That’s the conclusion of Pablo Perez-Fernandez, an analyst at Global Crown Capital, in San Francisco. Perez-Fernandez picked up coverage of both companies this morning with an Underweight rating, asserting that both stocks could drop 20 percent or more over the next six months. He notes that the GPS device business is “under stress from competition, suffering a major slowdown and under the threat of the mighty smartphone.”

He contends there is a “strong likelihood” that both companies could miss their full year 2008 guidance given light PND unit shipments. “We see downside around the next two earnings calls,” he writes, with the fourth quarter posing particular risk.

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