12:49 PM EDT, 10/30/2025 (MT Newswires) -- Garmin's ( GRMN ) Q3 revenue rose 12% year over year, driven by gains in its Fitness, Marine and Aviation segments, but declines in its Outdoor and Auto OEM units weighed on the results and outlook, Morgan Stanley said in a report Thursday.

Morgan Stanley said it expects the company's growth to "remain solid but decelerate further into 2026." The analysts noted the lack of a major new product launch in the Outdoor category until January 2027 when the Fenix 9 smartwatch is expected to debut, a factor expected to keep growth in 2026 below trend. The analysts also said they now project a 6% year-over-year decline for the segment in 2026, as new, major programs are not expected to begin ramping up until 2027.

Despite these headwinds, Garmin ( GRMN ) management remained upbeat about Q4, citing lean channel inventory and strong sell-through trends ahead of the holiday season. Fitness revenue is projected to climb about 30% year over year in Q4, supported by the new Venu 4 and Bounce 2 smartwatch launches and a consistent promotional strategy, the report said.

"Marine/Aviation outperformance this quarter were a positive surprise," Morgan Stanley said, adding that the overall slowing growth in revenue and earnings per share is seen as a key factor that will put pressure on the company's valuation.

Morgan Stanley maintained an underweight rating on the stock and raised its price target to $195 from $193.

Shares were down 1% in recent Thursday trading.

Price: 217.49, Change: -2.12, Percent Change: -0.97