This post was originally published on this site
Logitech (NASDAQ:LOGI) hosted an investor day, with analysts expressing some concerns about the company’s outlook.
Following the event, Citi analysts cut their price target on the stock to $60 from $70 per share.
They told investors in a research note that Logitech provided a much more bearish outlook on consumer hardware spending trends relative to some peers, with limited improvement expected from March 2023 levels, but the firm maintained its Buy rating on the stock.
“On a positive note, long-term targets were reiterated as management continues to see a large and growing TAM of gamers, hybrid workers and content creators, coupled with a leading market share across several categories, ASP premiumization and potential for margins to tick up once FX/component/logistics costs subside, as well as 20% y/y opex reductions,” the analysts wrote. “We believe the macro headwinds are currently reflected in the share price.”
BofA also maintained a Buy rating on Logitech and cut the firm’s price target to CHF 57 (CHF 1 = $0.9346) from CHF 65 per share. The analysts said in their note that Logitech “hosted a positive long-term investor day, showcasing its broad growth drivers and strategy across different markets. However, management was cautious and noncommittal on the timing of any recovery.”
“While we still expect a sequential recovery in topline and margins through FY24E, we cut our estimates and now forecast -11% yoy growth at CC (previously -1%). While visibility remains low, we reiterate our Buy rating as we believe that easing cost and FX headwinds can lead to margin expansion while valuation remains supportive,” the analysts said.
On the other hand, Morgan Stanley analysts kept an Underweight rating on Logitech shares but raised the firm’s price target to $40 from $39 per share.
“Mgmt surprised the Street by guiding F1H24 revs down 20% Y/Y at a ~9.5% operating margin, both well below the Consensus,” wrote the analysts. “We admit, the guide is conservative and F1H #s are likely de-risked, but the lack of full-year visibility (i.e. earnings risk) and stretched valuation keeps us UW with a $40 PT.”
Logitech shares have risen more than 2% so far in Thursday’s session.
