FactSet Insight of heading into 2026

 

from FactSet Insight

On the Buy rating, Microsoft, Amazon, Broadcom and Meta are old faces. Outside of energy and resource, should take a look at Qnity Elctronics and Boston Scientific.

On the Sell rating, surprised to see Garmin and ConEd.

According to FactSet Insight’s recent "Earnings Insight" reports (specifically from September and December 2025), Garmin (GRMN) has been identified as having one of the highest percentages of "Sell" ratings among companies in the S&P 500 for the upcoming fiscal year.

The high volume of sell ratings is driven by several fundamental and technical concerns highlighted by analysts:

1. Valuation Premium and Potential Downside

Analysts have expressed concern that Garmin’s stock price has outpaced its growth potential. As of late 2025, Garmin was trading at a price-to-earnings (P/E) ratio of approximately 25x, which is significantly higher than the industry average for Consumer Durables (around 11x). FactSet data suggests that the market may have already "priced in" the company's future innovation, leaving little room for further upside.

2. Slowing Earnings Growth Relative to the Market

While Garmin is fundamentally healthy, its growth is expected to lag behind the broader S&P 500:

  • Earnings vs. Market: Garmin’s forecast annual earnings growth for 2026 is roughly 6.6%–7%, which is significantly lower than the expected 15-16% earnings growth for the S&P 500 overall.

  • Revenue Growth: Revenue is projected to grow by about 7.3% per year through 2026, which is considered modest compared to high-growth tech peers.

3. Sector-Specific Headwinds

FactSet identifies Garmin within sectors—Consumer Staples and Consumer Discretionary (depending on the specific product segment)—that analysts are generally more pessimistic about for 2026. Specific bearish signals include:

  • Outdoor Segment Decline: Recent reports showed a 5% year-over-year decrease in outdoor revenue, a critical high-margin segment for the company.

  • Auto OEM Challenges: A decline in Auto OEM (Original Equipment Manufacturer) sales due to the aging of legacy programs has raised concerns about the sustainability of revenue in that division.

  • Margin Pressure: While Garmin is winning innovation awards (such as for CES 2026), investments in AI and new technology are expected to put pressure on short-term operating margins.

4. Comparison to Peers

In the "Scientific & Technical Instruments" industry, Garmin's consensus "Sell" rating stands in contrast to competitors like Keysight (KEYS) or Trimble (TRMB), which hold "Strong Buy" ratings. Analysts believe these competitors offer better risk-adjusted growth profiles for 2026.

Summary of Ratings (Per FactSet/MarketBeat):

  • Sell Ratings: ~36% to 60% (varies by specific weekly report)

  • Hold Ratings: ~36% to 40%

  • Buy Ratings: ~0% to 27% (significantly lower than the S&P 500 average Buy rating of 57%)

In short, the "Sell" rating reflects a belief that Garmin is a "great company but an expensive stock," where the risk of price contraction is higher than the likelihood of significant further gains through 2026.

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