11:19 AM EST, 11/07/2025 (MT Newswires) -- GoPro's ( GPRO ) Q3 earnings highlighted challenges amid a tough demand backdrop, but the company will likely see an improving setup in 2026 with the launch of new products and opportunities for artificial intelligence licensing deals, Morgan Stanley said in a note Friday.

However, "consistent execution" remains a key hurdle for GoPro ( GPRO ), the investment firm said.

Management issued guidance for Q4 that was "modestly" below Morgan Stanley's estimates due to lackluster consumer spending and tariffs, which will likely present a $45 million headwind for the company in 2026, weighing on gross margins although supply chain changes and pricing could mitigate the impact, according to the note.

A potentially interesting story is emerging in 2026 as the company is seen to launch its Hero14 camera in H1, which will likely improve 2026 revenue and adjusted EBITDA forecasts, and possibly license real-world GoPro ( GPRO ) video for AI model training, the investment firm said.

Morgan Stanley increased its price target on the stock to $1.30 from $0.80, while keeping its underweight rating.

Shares of GoPro ( GPRO ) were down nearly 8% in recent trading Friday.

Price: 1.57, Change: -0.14, Percent Change: -7.94