Logitech International (LOGI) stands to benefit from a growing total addressable market, or TAM, and trends supporting growth in the workplace and gaming sectors, Morgan Stanley said in a note Wednesday.
However, macro uncertainty remains a reason for caution in the near term, the analysts said.
The company's fiscal Q1 results were "modestly better than expected," and its fiscal Q2 guidance implies a 2% to 7% upside versus the previous Management Street Estimate, Morgan Stanley said. Logitech gained from pricing increases and demand stability in the quarter, they added.
International demand for Logitech products is "robust," but US demand remains "weak and inconsistent" given the tariff volatility. US consumers will be the biggest swing factor in the next 12 months, according to the note.
In the near term, the analysts said macro uncertainty is causing enterprise hardware spending to slow, while consumer spending intentions remain persistently negative.
Morgan Stanley maintained the company's stock rating at equal-weight, while adjusting the price target to $92 from $78.
Price: 93.37, Change: -0.40, Percent Change: -0.42
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