Logitech International's (LOGI) US consumer remains as a "key swing factor" into the December quarter after its North American market saw a second consecutive quarter of annual declines in fiscal Q2, Morgan Stanley said in a Wednesday note.

The company reported fiscal Q2 non-GAAP earnings late Tuesday of $1.45 per diluted share and $1.18 billion in net sales. Morgan Stanley said the results were in line with its expectations, with the outperformance of Logitech's international markets partially offsetting the declines in North America.

"As expected, higher prices in the US weighed on US consumer demand, which was most evident within gaming," the investment firm said, noting Logitech management's commentary on continued US demand uncertainty into the holiday season.

Morgan Stanley also noted Logitech's "impressive" gross margins, driven by product cost reductions, price increases, and foreign exchange tailwinds.

Morgan Stanley raised its price target on Logitech International stock to $108 from $92, with an equal-weight rating.

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