Citi has revised its price target for Logitech International (LOGI, Financial), reducing it from $105 to $75 while maintaining a Neutral rating on the stock. The adjustment comes amidst evolving market conditions and anticipated changes in the North American communication equipment sector due to recent tariff exemptions announced by the U.S. administration on products including PCs and smartphones.
The firm has, however, expressed concerns over weak demand induced by broader economic factors, leading it to lower projections for data center capital expenditure and PC sales. Despite potential market rallies, Citi is cautious about enterprise spending, noting that many companies are likely to stick to their fixed IT budgets, potentially limiting increased capital expenditure in response to price hikes.
Additionally, the consumer segment is expected to feel significant pressure due to inflationary trends and reduced demand. As a result, Citi expresses a preference for stocks linked to artificial intelligence servers over traditional enterprise stocks, considering the latter's reluctance to adjust their financial allocations significantly in the current economic climate.
