Wedbush upgrades On Holding to Outperform, raises price target to $25

As previously reported, Wedbush analyst Tom Nikic upgraded On Holding to Outperform from Neutral with a price target of $25, up from $20. The firm believes that On Holding is one of the most compelling growth stories in its space. The brand is extremely hot right now, Wedbush thinks it beat expectations for Q4, it has a major runway for wholesale distribution expansion, it has major margin tailwinds in 2023, and the firm’s survey work shows impressively high levels of consumer loyalty and a high degree of purchase intent among non-customers. Valuation does remain lofty, but appears to be justified by industry-leading revenue growth, a resumption of margin expansion, a steady stream of upward revisions post-IPO, and a cash-rich balance sheet, Wedbush says.