Logitech International (LOGI) faces negative consensus estimate revisions on sales and earnings as falling personal computer demand weighs on its accessories and gaming businesses, while solid margins may not lift profit because the company is expected to reinvest savings, Morgan Stanley said in a note Wednesday.

The investment firm expects Logitech's fiscal 2027 and fiscal 2028 revenue to face more than 5% downside, with fiscal 2028 earnings per share potentially coming in 5% to 10% than its power.

Rising computer prices, weaker consumer spending and growing channel inventory could lead to further declines in PC shipments, which could lead analysts to lower their revenue forecasts, Morgan Stanley said.

Video collaboration and slightly better gross margins could offset some weakness, but most margin gains are likely to be spent on growth plans rather than added to earnings, according to the note.

Morgan Stanley kept its underweight rating and cut its price target to $88 from $89, saying its cautious view reflects weaker conditions in the wider PC market rather than problems with Logitech's business execution.

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