Is Fitbit in Trouble With Apple's New Watch?

Consumer Electronics

Published: September 13, 2018 1:00 pm

Last Updated: January 11, 2020 5:57 pm

Fitbit Inc. (NYSE: FIT) shares bounced back in Thursday’s session after posting a loss of nearly 7% on Wednesday in regards to the Apple Inc. (NASDAQ: AAPL) presentation for its fall product lineup. Most of this drop centered on the new Apple Watch, which could pose a threat to Fitbit.

Apple’s newest smartwatch, which starts retailing at $399, can now perform an electrocardiogram (ECG) and detect atrial fibrillation or when a person’s heart rate is too low. This watch is even approved by the U.S. Food and Drug Administration (FDA) for direct-to-consumer purchase, which is a first for over-the-counter ECG-enabled devices.

The new Apple Watch will be available for preorder on September 14, and it will begin selling on September 21.

Morgan Stanley’s Yuuji Anderson jumped after this presentation and weighed in on the Apple/Fitbit relationship. Overall, he believes that the drop in Fitbit’s shares on Wednesday rightly reflected the concerns over the pace of software and sensor improvements, when compared to the Fitbit ecosystem.

As a result, Anderson issued an Underweight rating with a $4 price target for Fitbit, implying a downside of 27.7% from Wednesday’s closing price of $5.53. He went on to say in his report:

We are more concerned that the health and fitness functionalities between the Versa and Charge 3 are not sufficiently differentiated to avoid cannibalization and its aggregate demand will not sufficiently offset legacy product declines exiting the year,

Shares of Fitbit were up 1.6% at $5.62 in Thursday’s session. The stock has a consensus analyst price target of $6.35 and a 52-week trading range of $4.51 to $7.79.

Apple traded up about 3% to $227.57, in a 52-week range of $149.16 to $229.67. The consensus price target is $222.42.

24/7 Wall St.
Why Goldman Sachs and Others See More Weakness Across Semiconductor Sector

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.