Zebra Technologies' (ZBRA) 2025 earnings guidance was about 7% below analyst estimates amid tariff uncertainty, overshadowing stronger-than-expected Q4 orders and early 2025 sales momentum, UBS said in a note Tuesday.

The company factored in potential impacts from China's 10% and Mexico's 25% tariffs into its guidance but aims to offset them through pricing and supply-chain adjustments, the investment firm said.

Sales outlook remains positive in early 2025, with mid-single-digit growth expected after Q1 and year-on-year earnings projected to rise in the low double digits, UBS said.

Visibility past Q1 is limited, partly due to uncertain trade policies and a stronger US dollar also affecting international demand, according to UBS.

Tariff impacts are projected to peak in Q2 and then taper off in Q3, with full mitigation anticipated in Q4, while the company expects its China exposure to shrink by year-end, UBS analysts noted.

Bolt-on acquisition of Photoneo is set to close in Q1, offering about 30 basis points of revenue uplift this year with scope for further mergers and acquisitions or shareholder returns, the note added.

UBS maintained a buy rating for Zebra Technologies and lowered its price target to $425 from $445.

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