Morgan Stanley raises rating, price target on Logitech, shares up

Investing.com -- Morgan Stanley upgraded Logitech (NASDAQ: LOGI) International to "Equal-weight" from "Underweight" citing consensus long-term growth expectations and improved valuation. Shares of the computer keyboard and mouse maker Logitech were up more than 2% in premarket trading.

Brokerage said consensus expectations now forecasting a 4% compound annual growth rate through 2027, a 100bps above Morgan Stanley’s expectations

The brokerage lifted its price target for the computer peripherals maker to $92 from $73, reflecting an 18x target price-to-earnings multiple for fiscal 2027 EPS of $5.10.

Morgan Stanley (NYSE: MS) highlighted improved PC and peripherals data, less discounting in the December quarter, and disciplined operating expenses as factors driving its fiscal 2025 EPS forecast 3% above the Street's expectations. It also sees a potential near-term catalyst if Logitech raises fiscal 2025 operating income guidance during its earnings report next Tuesday.

Expects Logitech to post a modestly stronger FY25 outlook than anticipated, forecasting a revenue of $4.43 billion, operating income of $757 million and an EPS of $4.71

Brokerage pointed to balanced risks and rewards, with a bull case valuation of $122 and a bear case of $64. Downside risks include weaker consumer demand and import tariffs from China, while upside drivers could include stronger cycles, cost controls, or M&A.

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