BTIG analyst Janine Stichter has reiterated their neutral stance on ONON stock, giving a Hold rating yesterday.
Janine Stichter has given his Hold rating due to a combination of factors surrounding On Holding AG’s recent performance and future outlook. While the company demonstrated strong underlying demand and a gross margin that exceeded expectations, its Q4 revenue fell short of consensus, largely due to foreign exchange headwinds. Stichter notes that direct-to-consumer (DTC) sales continue to outperform wholesale, yet both segments did not meet the anticipated growth rates, especially in the Americas. Moreover, the back-end weighted guidance, with a concentration of headwinds expected in the first half of the year, presents some near-term risks, which are compounded by the company’s relatively high valuation compared to its peers.
Looking forward, On Holding AG has a robust pipeline of innovative products and has made significant strides in diversifying its offerings. The company’s strong position in running and potential in apparel and training could drive broader growth. However, the forecast for 2024, while showing confidence in continued currency-adjusted growth, is complicated by the impact of foreign exchange rates and other market challenges. Despite the positive medium-term growth algorithm and a gross margin outlook that aligns with the company’s targets, the cautious revenue forecast slightly below consensus and premium valuation lead Stichter to maintain a Neutral stance on the stock.
In another report released yesterday, Williams Trading also maintained a Hold rating on the stock with a $26.00 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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