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On Wednesday, Bernstein analysts reaffirmed their optimistic stance on On Holding AG (NYSE:ONON), maintaining an Outperform rating and a $70.00 price target. Currently trading at $57.38, the stock has shown impressive momentum with a 58% return over the past year. The research firm highlighted the athletic footwear and apparel company’s strong brand momentum, which was evident in the recent first-quarter results. According to InvestingPro data, analyst consensus remains strongly bullish, with price targets ranging from $45 to $76. On Holding’s revenue growth surpassed estimates and previous guidance across all regions, prompting the company to raise its top-line guidance for future quarters.
The company’s management team reported robust performance in the United States, bolstered by two successful new product launches, including one item that commanded a price point $10 higher than previous offerings. This pricing power is reflected in the company’s impressive 60.6% gross profit margin. Despite the challenging macroeconomic environment, On Holding’s direct-to-consumer (DTC) and wholesale channels showed no signs of slowing down, with revenue growing at 34.9% year-over-year.
Bernstein’s analysis suggests that On Holding’s low market share in the U.S., combined with its ability to set prices and attract a higher-income consumer base, positions the company well to withstand a potential macroeconomic downturn. The analysts see On Holding as a resilient player and one of their top picks in the event of a U.S. economic slowdown.
Looking ahead, Bernstein remains bullish on On Holding’s short-term and long-term prospects. The firm anticipates that the company’s structural growth will continue across various markets and product categories. This growth trajectory, according to Bernstein, is supported by the strength of On Holding’s brand and its potential for further revenue beats in the coming quarters. InvestingPro analysis reveals 18+ additional insights about ONON’s valuation and growth prospects, including detailed financial health scores and comprehensive growth metrics. Get access to the full Pro Research Report, along with advanced analysis tools and expert insights, with an InvestingPro subscription.
In other recent news, On Holding AG has received multiple analyst updates reflecting confidence in its financial performance and growth potential. The company reported a robust quarter with a 40% revenue increase on a constant currency basis, leading to an adjusted EBITDA of CHF 120 million, surpassing expectations. KeyBanc Capital Markets raised its price target for On Holding to $68, citing strong brand positioning and potential for better-than-expected financial results. BofA Securities also increased its price target to $75, driven by anticipated stronger organic sales growth and price adjustments in the U.S. market.
Evercore ISI updated its price target to $70, maintaining an Outperform rating, and highlighted the company’s ability to exceed revenue expectations despite economic challenges. BTIG echoed this sentiment, raising its target to $70 and emphasizing On Holding’s consistent market share gains and potential for sustained revenue growth. Needham raised its target to $62, acknowledging the company’s impressive growth trajectory and ability to outperform financial expectations. These developments underscore a broadly positive outlook among analysts for On Holding AG’s continued success in the competitive footwear industry.
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