Anna Andreeva, an analyst from Needham, maintained the Buy rating on On Holding AG (ONON – Research Report). The associated price target was raised to $45.00.
Anna Andreeva has given her Buy rating due to a combination of factors that demonstrate the strong performance and future potential of On Holding AG. The company surpassed sales expectations in the first quarter of 2024, showing consistent demand in direct-to-consumer (DTC) channels as well as in the Americas, maintaining its momentum from the previous quarter. This is particularly noteworthy given that it was achieved despite the potential drag from holiday promotions. Moreover, On Holding AG’s gross margins improved significantly, beating estimates thanks to a strategic shift towards more DTC sales and efficient inventory management.
Further bolstering Andreeva’s positive outlook is the company’s current quarter-to-date momentum in both DTC and wholesale channels, with key styles expected to drive a reported sales increase of 25% in the second quarter. The company is also poised for accelerated growth in the second half of 2024 due to easing comparatives, strong innovation in their product pipeline, and diminishing foreign exchange headwinds. Additionally, operational optimizations at their Atlanta warehouse—despite causing temporary product shortages—are being addressed, which should further improve product availability and sales. As a result of these factors, Andreeva has raised her estimates and price target for On Holding AG, reaffirming the stock as a top pick.
In another report released today, Telsey Advisory also maintained a Buy rating on the stock with a $37.00 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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