Increasing competition could hinder Logitech , adding pressure to a company already at risk of seeing a demand slump, UBS said. Analyst Joern Iffert downgraded the stock to sell from neutral. Iffert also cut his price target to CHF43 from CHF57. His new price target implies the stock will fall more than 20%. U.S.-listed shares of Logitech fell more than 1% in the premarket. “We think Logitech is facing increasing challenges,” Iffert said in a note to clients Wednesday. Logitech beat Wall Street consensus when reporting fiscal fourth quarter earnings Monday. The company posted 50 cents in adjusted earnings per share, higher than the 41 cents expected by analysts polled by StreetAccount. Logitech also reported $960.1 million in revenue, ahead of StreetAccount’s $935.7 million estimate. But the company also gave an outlook that pointed to declining sales. Iffert noted the rising competition from larger consumer companies focused on products within alternate and virtual reality, which can impact sales growth in the medium to long term. He pointed to the fact that, when competitors entered markets for products such as smart speakers, wireless earbuds and smart home cameras, the company lost sales and market share. Iffert also said demand for some hardware electronics could see limited growth coming off tough comparable periods that were elevated by the pandemic. Tight end markets within consumer electronics could result in promotions, he said, which would in turn drag on corporate gross margins. (More broadly, analysts have warned that some consumer electronics and personal technology companies could struggle as demand cools off pandemic booms.) Additionally, the analyst cut his expectations for earnings per share in fiscal years 2024 to 2026 by between 4% and 8%. Elsewhere, he called the stock’s price-to-earnings multiple “stretched,” citing low barriers to entry and risks to company earning in the coming years. U.S.-listed shares of Logitech have lagged the broader market this year, rising just 1.7%. LOGI 1D mountain Logitech — CNBC’s Michael Bloom contributed to this report.
