On Wednesday, Williams Trading adjusted its stock price target for On Holding AG (NYSE:ONON), increasing it to $40 from the previous $33, while retaining a Hold rating on the shares. The firm's analyst cited the revision of estimates and the price target, acknowledging that while strong results have been factored into the current share price, the demand for On products continues to be robust.
The analyst noted that On Holding AG is trading at a forward-year two price-to-earnings (P/E) ratio of 43.1 times and an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 26.2 times, which is considered high. Despite this, there is an expectation that the company's third-quarter 2024 results will surpass expectations, which are set to be reported before the market opens on Tuesday, November 12th.
The report also mentioned that for the stock to maintain its upward trajectory, it would be imperative for On Holding AG to significantly outperform street estimates and elevate its full-year 2024 guidance. The analyst emphasized that the second-quarter 2024 results would need to be near perfect given the stock's current valuation.
In summary, the market's anticipation for On Holding AG's upcoming financial disclosures is high, with the company's performance in the third quarter and the potential revision of full-year forecasts being pivotal for future stock momentum. The next significant update for investors and analysts will come with the company's third-quarter earnings release on the aforementioned date.
In other recent news, On Holding AG has been the focus of several analyst upgrades and price target revisions. Truist Securities adjusted its price target for the company to $58.00, reaffirming its Buy rating. This adjustment reflects robust demand trends supported by increased brand awareness and the introduction of popular products.
BofA Securities upgraded On Holding from Underperform to Neutral, following a significant 29% increase in the company's second quarter revenue.
Stifel maintained its Buy rating, raising its price target for On Holding to $59, while Piper Sandler assigned an Overweight rating with a price target of $52. KeyBanc reiterated an Overweight rating and a $47 price target, while TD Cowen increased its price target to $50, citing a robust product pipeline and expected growth in direct-to-consumer sales.
These recent developments come in the wake of strong financial performance, with On Holding reporting a 27.8% increase in net sales to CHF 567.7 million and a substantial rise in net income to CHF 30.8 million.
The company's management also reaffirmed its commitment to accelerating EBIT growth, indicating a strong second half for the company. The company expects currency-adjusted sales growth of at least 30% and net sales of at least CHF 2.26 billion, with a gross margin around 60% for the full year of 2024.
InvestingPro Insights
On Holding AG's (NYSE:ONON) financial metrics and market performance align with the analyst's observations in the article. According to InvestingPro data, the company's P/E ratio stands at 84.23, which supports the analyst's view of a high valuation. This is further corroborated by an InvestingPro Tip indicating that On is "Trading at a high earnings multiple."
The company's strong market position is reflected in its impressive revenue growth of 28.49% over the last twelve months, with a robust gross profit margin of 59.97%. These figures underscore the "robust demand for On products" mentioned in the article. An InvestingPro Tip notes that "Analysts anticipate sales growth in the current year," aligning with the positive outlook discussed.
On's financial health appears solid, with an InvestingPro Tip highlighting that the company "Holds more cash than debt on its balance sheet." This strong financial position could provide flexibility for future growth initiatives.
For investors seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for On Holding AG, providing a deeper understanding of the company's financial landscape and market position.
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