Analyst Alexandra Straton from Morgan Stanley maintained a Buy rating on On Holding AG (ONON – Research Report) and increased the price target to $40.00 from $35.00.
Alexandra Straton has given his Buy rating due to a combination of factors including On Holding AG’s strong first-quarter performance and management’s confident outlook for the year. On Holding AG surpassed market expectations in both EBITDA and margin, with direct-to-consumer (DTC) and wholesale revenues notably exceeding projections. Gross margins were also robust, running near the company’s annual target, a result largely attributed to the higher penetration of direct consumer sales. The majority of the revenue growth was driven by impressive sales in the Americas, followed by the APAC and EMEA regions.
Furthermore, On Holding AG’s upward revision of annual revenue growth and EBITDA guidance reflects strong demand observed in the current quarter. Even though the guidance adjustment appears primarily influenced by foreign exchange considerations, the overall increase in expected growth and profitability exceeds what was implied by the first-quarter results. Additionally, the stock’s significant positive reaction suggests that the market had anticipated the strong results, and with a considerable short interest in the stock, this led to an amplified positive price movement. Alexandra Straton maintains that On Holding AG has the potential for continued sales and gross margin improvements, underpinning the overall Buy recommendation.
According to TipRanks, Straton is a 2-star analyst with an average return of -0.4% and a 51.22% success rate. Straton covers the Consumer Cyclical sector, focusing on stocks such as Macy’s, Nike, and On Holding AG.
In another report released today, Barclays also maintained a Buy rating on the stock with a $40.00 price target.
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On Holding AG (ONON) Company Description:
On Holding AG is a premium performance sports brand rooted in technology, design, and impact. Its shoe, apparel, and accessories products are designed primarily for athletic use, casual, or leisure purposes. It does not manufacture the products or the raw materials and rely instead on third-party suppliers and contract manufacturers.
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