On Thursday, Citi reiterated its Neutral rating on Logitech (NASDAQ:LOGI) International (NASDAQ:LOGI), maintaining a price target of $102.00. The firm's stance comes ahead of the company's earnings report, scheduled for October 22.
Citi's analysis suggests that while Logitech remains a quality franchise, a return to its target growth rate may be delayed due to a subdued demand for PCs and peripherals in the near term. Furthermore, the recent appointment of a new CFO makes significant growth through acquisitions unlikely in the immediate future.
Citi expects Logitech's gross margins to be slightly better than Wall Street's predictions for the upcoming quarter. This projection is based on a stable promotional environment and a favorable shift in the average selling price (ASP) mix. However, the company may face increased competition, particularly in China, where there is a growing market for lower-end gaming peripherals.
The financial institution's report indicates that Logitech's shares are currently trading at 18 times the calendar year 2026 Street earnings per share (EPS) estimate, or 15 times when excluding cash. According to Citi, the stock price is likely to stay within a certain range until there is clear evidence of top-line growth.
In other recent news, Logitech International S.A. has decreased its share capital, a decision reflected in an amendment to its Articles of Incorporation. The change is attributed to the cancellation of shares that the company repurchased as part of an ongoing buyback initiative.
In parallel, Logitech G has unveiled a collection of gaming gear in a global partnership with Genshin Impact and launched the AI Game Highlighter, a tool designed to streamline content creation for game streamers. The company also introduced new products, including the Logitech G ASTRO A50 5th Generation Wireless Gaming Headset and Base Station, and the PRO Series gear, targeting elite esports athletes and competitive gamers.
InvestingPro Insights
As Logitech International (NASDAQ:LOGI) approaches its October 22 earnings report, InvestingPro data offers additional context to Citi's analysis. The company's P/E ratio of 19.33 aligns closely with Citi's observation of the stock trading at 18 times the 2026 EPS estimate. Notably, Logitech's PEG ratio of 0.16 suggests the stock may be undervalued relative to its growth prospects, potentially offering a counterpoint to Citi's cautious stance.
InvestingPro Tips highlight Logitech's financial strength, revealing that the company holds more cash than debt on its balance sheet. This solid financial position could provide flexibility as the company navigates the subdued demand for PCs and peripherals mentioned in Citi's report. Additionally, Logitech has raised its dividend for 11 consecutive years, with a current dividend yield of 1.59%, demonstrating a commitment to shareholder returns despite market challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into Logitech's market position and future prospects.
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