As soon as the excitement around GoPro’s Karma and HERO5 5 unveilings began to fade, so its stock price started to slip as well. However, GoPro shares are edging a little higher on Wednesday following a few price target increases from various firms. Most analysts agree that there is plenty to like about the Karma and both HERO5 cameras; even some of the biggest bears found the new devices agreeable.
Goldman Sachs ups GoPro target
In a report dated September 20, Goldman Sachs analyst Simona Jankowski reiterated her Neutral rating but increased her price target on GoPro from $12.50 to $14 per share, citing “better product visibility and compelling features.” She sees a “favorable” setup going into the end of the year as it cleared out its inventory at the end of the second quarter and added support for seven languages to its products, which she said should serve to strengthen its presence outside the U.S.
She believes the Karma has some important features that serve to set it apart from other drones that are on the market, such as a stabilizer that can be removed and a foldable design that makes it fit in a small case and fit into small spaces. She also feels the Karma is competitively priced at $799, compared to DJI’s comparable drone at $1,000.
She estimates the drone market at $2 billion currently and believes that it’s still early for the market and that what’s left of it is up for grabs. She believes GoPro can leverage its brand, retailer shelf space and global distribution footprint to grab a share of the market.
Wedbush analyst Nick McKay also raised his price target for the camera and drone maker, boosting it from $14.50 to $17.50 per share while maintaining his Outperform rating. He applauded the Karma, emphasizing that its apparent simplicity is its main appeal.
Hilliard Lyons analyst Stephen Turner also bumped up his price target for GoPro to $19 to $19.50 per share (for the end of fiscal 2018) and maintained his Long-term Buy rating.
GoPro cuts price point for the HERO5
GoPro has priced the HERO5 Black at $399, a $100 reduction from its predecessor, the HERO4 Black. The HERO5 Session is in the mid-tier position at $299 (and also $100 less than the HERO4 Silver), while the unpopular original Session camera is at the low tier at $199.
Morgan Stanley analyst Jerry Liu is still extremely bearish on GoPro with an Underweight rating and $9 price target, but he sees the reduced price point as a positive. He believes that the cheaper price and new features could drive more refreshes and also encourage new customers to buy. In fact, he’s predicting a brighter holiday shopping season for GoPro this year compared to last year.
Liu agrees with Jankowski that the versatility of the Karma is its key selling point, although he believes that competition and limited distribution could result in slow adoption. He described the Karma as three products in one: a drone with controller, a detachable camera stabilizer and a camera, which is priced $100 less when bundled with the Karma rather than on its own.
GoPro shares rose by as much as 4.42% to $14.89 during regular trading hours on Wednesday after tumbling on Tuesday in the wake of a solid performance on Monday around the product reveals.