On Wednesday, Truist Securities adjusted its price target for On Holding AG (NYSE: ONON) shares, increasing it to $34 from $30, while maintaining a Hold rating on the stock.
The adjustment follows On Holding's shares surging approximately 18% on the same day, contrasting with a relatively flat performance by the S&P 500.
The revision was sparked by On Holding's first-quarter revenue and EBITDA, which both slightly exceeded consensus expectations. Additionally, On Holding reaffirmed its forecast for over 30% growth in constant currency for the fiscal year.
The company also modestly increased its full-year revenue outlook due to favorable foreign exchange rates, now anticipating 2024 revenues of at least 2.29 billion CHF, compared to the previously expected 2.25 billion CHF.
Management at On Holding expressed a very positive outlook across the board, which contributed to the stock's significant uptick.
Despite this optimism, Truist Securities expressed caution, citing the high expectations set for the remainder of the year given On Holding's current valuation, which is approximately 26 times the firm's forward twelve months (FTM) EBITDA forecast.
Truist Securities concluded that the risk/reward balance for On Holding at its current valuation is even, which supports their decision to maintain the Hold rating despite the increase in the price target.
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