First Read Logitech Some follow up thoughts on recent news

Research evidence excerpt

First Read Logitech Some follow up thoughts on recent news

UBS Cons.

sales force teams in B2B where accelerating growth is a key strategic initiative. These 03/27E 5.04 5.58

reinvestments plans are know since the last results in May. But now we got more colour 03/28E 5.34 6.10

on the run rates of additional reinvestment which we estimate to be $30-60m 03/29E 5.74 6.71

annualised (UBSe) impacting margins by up to 100bp in the full year we think. We

overall think the company is following the right strategy to secure long term prospects Joern Iffert, CFA

Analyst

but investors will likely focus on the near term earnings momentum (more muted).

joern.iffert@ubs.com

+41-44-239 88 00

Thoughs on the semi component shortage risks and full year consensus

Marti Queral Ferre, CFA

Recall, Logitech stated due to a semi component shortage risks, sales in gaming and

mice & keyboards could be impacted by up to $20m in Q2 27E and up to $200m in Q3 marti.queral-ferre@ubs.com

27E (aggregated c4% of group) while the company expects no impact in Q4 27E +41-44-236 9246

anymore. The company has multi sourcing strategies in place and is working on

mitigating plans. We certainly also see a scenario the impact will be limited. That

said,and backed by management commentary, we think the non GAAP EBIT can range

between $840-880m in FY 27E but also see a scenario it is flattish y/y, being in line with

consensus. We confirm our view and see initially low to mid single digit downside risk to

consensus. We think Logitech`s brand strength will support market shares despite risks

some SKU have limited availability for a short time period.

Valuation: DCF based PT of CHF80; investor sentiment view

We expect some impact on investor sentiment, mainly because of the Q2 27E core