Figma Shares Indicated To Open $105/$110
On Friday, BofA Securities issued a downgrade for Logitech (SIX:LOGN) International (NASDAQ:LOGI) shares, moving the rating from Neutral to Underperform. The firm also adjusted the price target for Logitech to $90.00, down from the previous target of $105.00. Currently trading at $101.21 with a market capitalization of $14.38 billion, Logitech has seen a strong YTD return of 23%. According to InvestingPro analysis, the stock appears fairly valued based on its proprietary Fair Value model. The revision comes as BofA Securities anticipates a challenging growth outlook for the company.
BofA Securities analysts have revised their revenue and earnings per share (EPS) estimates for Logitech for fiscal years 2026 and 2027. The revenue forecast has been decreased by 2.6%, while the EPS estimates have seen a reduction of 6-10%. These adjustments are based on lower gross margin (GM) assumptions and a weaker product mix expected in the coming years. InvestingPro data shows the company maintains a healthy gross profit margin of 43.3% and has achieved revenue growth of 7.3% over the last twelve months.
The new price objective suggests that Logitech stock would trade at 15 times its fiscal year 2026 estimated enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). This is a decrease from the prior multiple of 16 times. Currently, the stock trades at an EV/EBITDA multiple of 16.7x and a P/E ratio of 22.9x. According to BofA Securities, this valuation is aligned with Logitech’s historical median multiple, which has ranged from 10x to 21x, excluding the COVID-19 period.
In their analysis, BofA Securities expressed a more cautious stance on Logitech’s Pointing Devices and Gaming segments. They anticipate that these areas will not perform as well as expected, which could potentially hinder the stock’s ability to command a higher valuation. Conversely, the firm holds a slightly more positive view on the prospects for Logitech’s Video Collaboration segment.
The downgrade reflects concerns about Logitech’s future growth prospects, as BofA Securities believes that if the company’s growth falls short of expectations, the stock may face difficulties in achieving a higher valuation.
In other recent news, Logitech International SA reported strong financial results for the fourth quarter of 2024. The company posted an earnings per share (EPS) of $1.59, surpassing analyst expectations of $1.37, while revenue reached $1.34 billion, exceeding the forecasted $1.25 billion. This performance highlights Logitech’s effective operational strategies and market positioning. Additionally, Logitech successfully completed a merger with KMC, which significantly enhanced its portfolio and contributed to an increase in market capitalization. Meanwhile, BofA Securities downgraded Logitech’s stock rating from Neutral to Underperform, lowering the price target from CHF 91.00 to CHF 80.00. This downgrade reflects concerns over Logitech’s future growth potential, particularly in the Pointing Devices and Gaming divisions. BofA Securities also revised its revenue and EPS estimates for Logitech for the fiscal years 2026 and 2027, citing expectations of a decreased gross margin and a less favorable product mix. Despite these concerns, Logitech’s recent earnings report demonstrates its strong financial health and strategic growth initiatives.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.