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On Thursday, Kepler Cheuvreux analyst Torsten Sauter upgraded Logitech (NASDAQ:LOGI) International SA (LOGN:SW) (NASDAQ: LOGI) stock rating from Hold to Buy, increasing the price target to CHF 100.00 from CHF 77.00. The upgrade followed Logitech’s strong third-quarter results, which Sauter highlighted as evidence of the company’s growth potential even in challenging market conditions. The company, now valued at $14.66 billion, has demonstrated solid performance with a 17.53% return year-to-date. According to InvestingPro analysis, Logitech currently trades near its Fair Value.
Sauter’s analysis pointed to Logitech’s success in maintaining growth from a higher base post-COVID, with particular strength in the Gaming and Video Collaboration sectors. These areas had previously seen some stagnation but are now showing signs of revival, a trend Sauter expects to continue. The company’s revenue grew 7.28% in the last twelve months, supporting this positive outlook. InvestingPro data reveals 14 additional key insights about Logitech’s market position and growth potential.
The analyst also noted the company’s ability to navigate post-pandemic market dynamics, including the replacement cycle for tech products. Sauter mentioned that the upcoming Corporate Management Day (CMD) in March, the first to be hosted by the new CEO and CFO, could serve as a catalyst for the company by potentially introducing refined financial targets. InvestingPro analysis shows Logitech maintains an overall "GREAT" financial health score, with liquid assets exceeding short-term obligations.
Logitech’s resolution of its challenges in China was also a significant factor in the upgraded rating. Sauter emphasized the importance of artificial intelligence (AI) integration in Logitech’s strategy, suggesting it could be key to mitigating risks associated with new and disruptive technologies. By leveraging AI, Logitech is expected to influence user behavior and adapt to evolving market demands, according to the analyst’s comments. Trading at a P/E ratio of 21.49, the stock shows promising value metrics relative to its growth potential. Discover comprehensive analysis and 15+ additional ProTips with a subscription to InvestingPro.
In other recent news, Logitech International reported a notable third quarter, exceeding analyst estimates and subsequently raising its full-year guidance. The company’s adjusted earnings per share stood at $1.59, surpassing the projected $1.37, while revenue increased by 7% YoY, reaching $1.34 billion and outperforming the consensus forecast of $1.25 billion. The gaming segment was a significant contributor, with sales nearing pandemic-high levels due to new product launches ahead of the holiday season. Logitech also reported robust performance in its premium Pro Gaming and MX portfolios. The company’s gross margin expanded 90 basis points YoY to 43.2% on a non-GAAP basis, reflecting improved operational discipline. Looking forward, Logitech has raised its fiscal 2025 outlook, now expecting revenue of $4.54-4.57 billion, up from its previous forecast of $4.39-4.47 billion and above analyst projections of $4.465 billion. The company also increased its non-GAAP operating income guidance to $755-770 million. CFO Matteo Anversa expressed confidence about the company’s business trajectory, given the strong Q3 demand and continued promotional and operational discipline.
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