Why Wall Street thinks Zebra Technologies could rally 26%?
Investing.com -- Zebra Technologies shares received a major boost on Wednesday after Wall Street analysts turned bullish and expect the stock to surge from its current levels.
Analysts at KeyBanc Capital Markets upgraded the stock to “Overweight” from “Sector Weight” and raised confidence in the company’s growth outlook following stronger-than-expected first-quarter 2026 results.
KeyBanc set a $305 price target on Zebra, implying roughly 26% upside from the stock’s recent trading level near $242. Analysts said the company is showing early signs of a broader recovery in short-cycle industrial demand, driven by improving activity across manufacturing, semiconductor, and automotive markets.
For the first quarter, Zebra reported adjusted EPS of $4.75, while KeyBanc now forecasts full-year 2026 EPS of $18.58 and revenue of about $6.04 billion. Analysts also see potential upside if industrial demand accelerates further, with a bullish scenario implying the stock could climb toward $350 per share.
The research note highlighted broad-based demand growth across regions and business segments during the quarter, while management also pointed to stronger order trends in industrial automation. Analysts said Zebra’s commentary aligns with improving trends seen across other industrial technology companies and macro indicators such as the ISM PMI and industrial production growth.
KeyBanc also expressed confidence that Zebra can offset rising memory costs, which have weighed on investor sentiment in recent quarters. The company expects to fully mitigate an estimated 200-basis-point margin headwind through internal cost reductions and selective pricing actions. Management said current guidance already assumes elevated DDR5 memory pricing throughout 2026 and noted no additional supply constraints are expected in the second half of the year.
The firm argued Zebra’s valuation remains attractive despite improving fundamentals. Shares are currently trading well below their historical average valuation multiples and at a discount to industrial technology peers, even as the company maintains comparable growth and margin profiles.