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Logitech Drops as Longtime Goldman Bull Downgrades on Valuation

Goldman Sachs downgraded Logitech. The investment had had a buy rating on the peripherals specialist since January 2019.
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Shares of Logitech (LOGI) - Get Logitech International S.A. Report were lower Friday after Goldman Sachs analysts downgraded the PC and gaming peripherals company to neutral from buy on valuation concern. 

The Swiss company more than doubled (up 109%) in 2020 and has gained another nearly 30% in 2021. Logitech has been a big beneficiary of the work-from-home trend as customers purchased new microphones, headphones, webcams and other devices for their home offices. 

Logitech shares at last check were 3.1% lower at $121.79. The stock on June 9 touched a 52-week high above $140. 

Goldman analyst Alexander Duval notes that the stock has more than tripled (up 221%) since he added it to Goldman's buy list in January 2019. The stock's forward price-to-earnings multiple has reached 31 from 19.

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Duval did not lower his estimates for the company's fundamentals. He remains bullish on the company's outlook for gaming peripherals, webcams and videoconferencing hardware. 

Goldman Sachs estimates 6% sales growth for fiscal 2022 and a reacceleration to high-single-digit growth starting in 2023 after the company has lapped tough comparisons from 2020. 

TheStreet's Jim Cramer recently interviewed Bracken Darrel, president and CEO of Logitah, on his "Mad Money" television show. 

Darrel told Cramer that the work-from-home trend is here to stay. While many people scrambled to set up their home offices in 2020, they're now setting them up with new products from Logitech.

Darrell said that many people still don't know about Logitech's full product range, including cameras, microphones, keyboards and mice. He said the company was spending more on marketing this year to help address that issue.