Logitech earns higher price target as new CEO impresses analysts

Logitech International SA (USA) (NASDAQ:LOGI) has earned a price target raise from Wedbush analysts on an “encouraging introduction” from new CEO Hanneke Faber and improving PC sales.

Faber joined the computer maker as its CEO on December 1 after previous chief Bracken Darrell left the company in June.

The new CEO hosted a Fireside Chat on December 7 which saw the analysts come away with increased confidence in the CEO’s experience and how she will use that to focus Logitech’s strategy going forward.

The analysts wrote in a note to clients that they agree with Faber’s initial assessment of what Logitech does well and where it could benefit from an updated strategy.

Based on Faber’s comments, they expect the company to focus on expanding its marketing prowess to drive revenue growth, lean on a technology/data-first sales approach to grow its video conference segment versus simply adding to its sales force, maintain a 6% to 7% research and development spend to continue driving revenue growth and gross margin expansion, and maintain its capital allocation strategy of dividend expansion, reinvestment in the business, mergers and acquisitions, and share repurchases.

“We expect no change to the company’s acquisitive nature, and with the cash it has on hand we think the company is looking broadly at ways to quickly expand its product portfolio, in addition to organic growth via expanding its marketing approach,” they wrote.

“Overall, we see a positive new chapter for Logitech under new management, although there is still a significant hurdle to overcome in meeting or exceeding targets in a difficult consumer environment this holiday period.”

The Wedbush analysts raised their price target on Logitech from US$80 to US$85 and maintained their ‘Neutral’ rating.

Logitech shares traded hands at US$89.87 on Monday afternoon and have gained 43% in the year to date.

“Should shares retract over the near-term, we would consider it a buying opportunity,” the analysts wrote.

“That said, we think there is limited upside from our current target before there is further evidence that Logitech can meaningfully exceed its stated 2024 financial year targets.”

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