UBS upgrades Logitech as gaming trends soar among Generation Alpha

On May 7, 2025, UBS, a global financial services company, announced an upgrade to Logitech's stock rating, moving it from neutral to buy. This decision comes amidst a notable increase in gaming among consumers from Generation Alpha, those born between 2010 and 2024. UBS's analysis indicates that approximately 94% of Generation Alpha are engaging with video games, representing a significant leap in comparison to previous generations. The bank set a price target of 80 Swiss francs for Switzerland-listed shares, suggesting a potential upside of 26.1%. The U.S.-listed shares are projected to reach around $96.50 if a similar gain occurs. Logitech's shares have declined by 7% this year, positioning the company as a relative underperformer compared to the S&P 500, which has fallen by 4%. UBS analyst Joern Iffert pointed out that this decline reflects investor uncertainties, but he remains optimistic about the company's margins and cash flows, which are likely to remain healthy due to strong pricing power in key product areas and a shift in sourcing strategies away from China. Additionally, Logitech is adapting to the growing trend of gaming as a marketing tool, with Iffert highlighting the preference of Gen Alpha consumers for brands they encounter in games, with nearly half reporting they purchased products endorsed by favorite streamers. Despite UBS's favorable view, most analysts maintain a neutral stance on Logitech, with six analysts rating the stock as a hold while just two recommend it as a buy. Following the announcement from UBS, Logitech's U.S.-listed shares rose by over 1% in premarket trading, reflecting some renewed interest driven by the analyst's rating change.