On Wednesday, Truist Securities increased its stock price target for On Holding AG (NYSE: ONON) shares to $51.00, up from the previous $46.00, while keeping a Buy rating on the stock. On Holding's shares saw an uptick of approximately 7.5% today, outperforming the S&P 500's 1% gain.
The rise came after the company reported second-quarter revenue and EBITDA that slightly surpassed market expectations. Moreover, On Holding reiterated its forecast for at least 30% growth for the full year on a constant currency basis.
Despite facing short-term pressures from foreign exchange fluctuations and temporary logistics challenges, On Holding has maintained strong demand across various regions, channels, and product categories. Analysts anticipate that the company's growth and profit margins will pick up speed in the second half of the year.
The optimism surrounding On Holding's stock is partly due to the company's strategic moves, including its recent wholesale expansion efforts. Furthermore, the brand has gained significant traction from its partnership with celebrity Zendaya and the increased visibility it received during the Olympics. These initiatives have contributed to rapidly growing brand awareness and are expected to continue propelling the company forward.
The updated price target reflects confidence in On Holding's continued momentum and its ability to capitalize on these strategic initiatives to enhance its market position and financial performance. The company's strong second-quarter results and the affirmation of its positive outlook for the year have reinforced this positive sentiment among investors.
In other recent news, On Holding AG reported impressive financial results in its second-quarter 2024. The company witnessed a 27.8% year-over-year increase in net sales, reaching CHF 567.7 million, and a significant rise in net income to CHF 30.8 million. The adjusted EBITDA reached CHF 90.8 million, with a gross margin of 59.9%, marking an increase from the previous year.
Baird has increased On Holding's price target to $50 from $46, maintaining an Outperform rating, following these robust financial results. Similarly, Goldman Sachs raised its price target for On Holding to $50 while maintaining a Buy rating, reflecting the company's strong second-quarter performance and the reaffirmation of its full-year 2024 guidance.
In addition to financial performance, On Holding has introduced new technology, including the LightSpray technology, and anticipates the launch of new products, such as the Cloudboom Strike and Cloudsurfer Next.
These recent developments underscore On Holding's commitment to innovation and growth. 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 2024.
InvestingPro Insights
On Holding AG (NYSE: ONON) has shown considerable promise, reflected in its robust financial metrics and strategic positioning. According to real-time data from InvestingPro, the company's market capitalization stands at a solid $13.16 billion. Investors are particularly impressed by the company's gross profit margin, which, for the last twelve months as of Q1 2024, is an impressive 59.87%. This indicator of financial health underscores the company's efficiency in managing its cost of goods sold and its potential for profitability.
InvestingPro Tips highlight that On Holding holds more cash than debt on its balance sheet and that analysts expect net income and sales to grow this year. These insights are particularly relevant as they suggest a strong financial foundation and potential for continued growth, aligning with the positive sentiment expressed by Truist Securities. The company's significant return over the last week, with a price total return of 11.69%, further reinforces the bullish outlook on the stock.
For readers interested in more detailed analytics, InvestingPro offers additional insights on On Holding, including more InvestingPro Tips that can guide investment decisions. Currently, there are 17 additional tips listed on InvestingPro, which can be found at: https://www.investing.com/pro/ONON. These tips provide a deeper dive into the company's valuation metrics, growth prospects, and financial health, offering a comprehensive view for potential investors.
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