Tuesday, On Holding AG (NYSE:ONON) received a reaffirmation of confidence from Stifel analysts, who maintained a Buy rating and a $66.00 price target on the company’s shares. Stifel's analysis is based on the sustained momentum of On Holding into the fourth quarter, following a strong third quarter performance. The co-CEOs of On Holding expressed substantial satisfaction with the business trends observed during the Holiday Season.
Stifel's recent meetings at the ICR Conference reinforced their view that 2024 marked a turning point for On Holding in terms of brand recognition, which doubled in the U.S. market, and engagement with younger consumers. This growth trajectory is supported by impressive financial metrics, with InvestingPro data showing revenue growth of 26.12% and an industry-leading gross profit margin of 60.18%. The analysts believe that On Holding's strategic category development and robust product cycle, combined with global growth opportunities, support the continuation of the company's top-tier growth rates into 2025 and beyond.
The firm's financial targets for fiscal year 2026, which include CHF 3.6 billion in revenue and EBITDA margins exceeding 18%, appear increasingly achievable. With a current market capitalization of $17.73 billion and an overall financial health score rated as "GREAT" by InvestingPro, Stifel's analysts are encouraged by the strengthening foundation of On Holding's brand, which they see as providing a platform to potentially scale the business to CHF 5 billion or more in revenue.
In their commentary, Stifel analysts highlighted the company's potential, stating, "We remain confident that ONON's best-in-category growth rates can sustain in 2025+. FY26 targets for CHF 3.6bn with 18% plus EBITDA margins are increasingly tangible and, given the strengthening brand foundation, we are emboldened by opportunities to scale the business to CHF 5bn+." They concluded by reiterating their recommendation for investors to consider On Holding shares as a core holding for growth-oriented portfolios. For a comprehensive analysis of On Holding's valuation and growth prospects, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which provides in-depth insights into the company's financial health and market position.
In other recent news, On Holding AG has been the focus of multiple analyst upgrades and price target revisions following robust earnings results. TD Cowen raised the company's stock price target from $65.00 to $66.00, maintaining a buy rating. This follows a proprietary survey by TD Cowen that tracked brand preference trends, indicating significant year-over-year gains for On Holding AG.
On a similar note, BofA Securities reinstated On Holding's coverage with a buy rating and set a price target of $73.00, highlighting the company's significant upside potential. UBS analysts also maintained their buy rating and a $63.00 price target on On Holding AG, predicting a roughly 22% five-year sales compound annual growth rate (CAGR) and an approximately 43% five-year earnings per share (EPS) CAGR.
However, Citi initiated coverage on On Holding with a neutral rating, acknowledging the company's rapid sales growth and impressive gross margins, but also noting high market expectations. Lastly, a Bernstein analyst revealed optimism among sportswear brands for the upcoming holiday quarter, particularly for premium brands like On Holding, which has demonstrated impressive performance with a revenue growth of 26% and industry-leading gross margins of 60%. These are recent developments that have been shaping the outlook for On Holding AG.
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