Zebra Technologies (ZBRA) posted largely in-line Q3 results, but a disappointing outlook and customer caution over spending leaves a smaller base for 2026 set up amid uneven demand across verticals, Morgan Stanley said in a Tuesday research report.

The Elo acquisition is expected to contribute $100 million in Q4, but complete mitigation of the tariffs is not expected until next year. The brokerage now expects Q4 non-GAAP revenue and EPS of $1.46 billion and $4.30, respectively, from $1.37 billion and $4.21 earlier, according to the note.

For full-year 2025, Morgan Stanley modeled non-GAAP revenue and EPS of $5.38 billion and $15.80, respectively, revised from $5.28 billion and $15.54 earlier, analysts wrote.

The brokerage said it reiterated its equalweight rating on the stock and raised its price target to $309 per share from $300.

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