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Investing.com -- Analysts at BofA Securities have upgraded their rating on Logitech (NASDAQ:LOGI) International S.A. (SIX:LOGN) stock to "neutral," citing improved business fundamentals and a stabilizing market environment in a note dated Friday.
The revision follows Logitech’s recovery from post-pandemic headwinds that impacted demand for its consumer electronics and peripheral products.
BofA Securities flagged Logitech’s resilience despite industry-wide challenges, including slowing PC sales and cautious consumer spending.
While demand has not fully returned to peak pandemic levels, analysts believe the worst of the downturn may be over.
Revenue trends have shown relative strength compared to earlier forecasts, and the company’s cost-control measures have helped mitigate pressure on margins, maintaining profitability in a competitive market.
The stock’s valuation, once seen as stretched amid uncertain demand conditions, is now viewed as more reasonable, supporting the upgrade.
BofA Securities also pointed to easing inflationary pressures, which previously weighed on consumer electronics spending, as a factor that could improve discretionary purchases.
Additionally, Logitech’s ongoing investments in innovation and product differentiation are seen as positives for long-term growth.
Despite the upgrade, analysts remain cautious about potential risks, including continued volatility in consumer spending and competition from both established and emerging players.
While the company has taken steps to improve operational efficiency, sustained revenue growth remains a key factor for future ratings adjustments.