Shares in Logitech International (LOGI) rose 3.5% in pre-market trading after the company announced a new, three-year share buyback program for up to $250 million of its common stock. The company’s board of directors also approved a proposal raise its fiscal 2020 dividend payout by 10%.
The stock advanced 3.5% to $56.75 in Thursday’s pre-market trading in the U.S.
The new buyback program, which is still subject to the approval of the company’s Swiss Takeover Board, replaces its prior buyback program that expired in April.
Logitech is among the tech companies doing well during the coronavirus pandemic as the need for its computer products rose. It reported a 14% sales increase in the first three months of the year fueled by the accelerating demand for cloud-based video collaboration, as more workers set up home offices, teachers adopted video for distance learning, and doctors implemented telemedicine.
Logitech’s board of directors also announced that Prakash Arunkundrum, head of global operations, will join as a new member of Logitech’s Group Management Team and will be an Executive Officer.
Shares in Logitech have been on a steep gaining streak since mid-March, skyrocketing 62% to $54.85 as of Wednesday’s close.
The stock rally prompted J.P. Morgan analyst Paul J Chung last week to cut Logitech’s rating to Hold from Buy, while maintaining a $57 price target. Chung said that valuation and the stock hitting the price target as well as sitting at all-time highs backed up his downgrade.
However, the analyst still sees Logitech continuing to benefit from the work-from-home demand momentum well into fiscal 2021.
The rest of Wall Street analysts are cautiously optimistic on the stock’s outlook. The Moderate Buy consensus brings together 3 Buy and 4 Hold ratings. The $58.73 average price target implies 7.1% upside potential in the shares in the next 12 months. (See Logitech stock analysis on TipRanks).
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