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On Tuesday, BTIG analyst Janine Stichter increased the price target for On Holding AG (NYSE: ONON) to $70 from the previous $67, while reiterating a Buy rating on the shares. The $16.62 billion market cap company, which boasts an impressive 60.63% gross profit margin, reported a robust start to the year with 40% constant currency (CC) growth in Q1, prompting the company to revise its CC revenue guidance upwards. According to InvestingPro data, the company has maintained strong momentum with a 67.19% return over the past year.
Stichter noted that despite the raised forecast, the company’s outlook remains conservative, not reflecting any significant slowdown for the rest of the year. This caution is seen even though there’s no current evidence suggesting a deceleration in growth. InvestingPro analysis reveals the company’s strong financial health with a "GREAT" overall score, supporting its ability to navigate market challenges. Additionally, the margin outlook has been broadened to factor in supply chain uncertainties due to tariffs, which the analyst considers a prudent measure of conservatism.
On Holding AG is recognized as a consistent market share gainer within a growing industry. Stichter highlighted the company’s multiple avenues for growth and the potential to sustain nearly 30% revenue growth over the medium term. This rate is approximately twice that of even the higher-growth companies in the sector. The company’s ability to expand margins positions it favorably, especially in managing tariff-related challenges.
The analyst’s optimistic perspective is further reinforced by On Holding’s valuation, which is considered justifiable by its premium position in the market. Stichter’s commentary underscores the belief that On Holding is one of the best-equipped companies to navigate through the complexities of tariffs, securing its place as a Large Cap Top Pick with a reiterated Buy rating and a raised price target.
In other recent news, On Holding AG has reported a robust financial performance, with revenues increasing by 40% on a constant currency basis, surpassing its guidance initially set in the low-to-mid-30% range. The company’s adjusted EBITDA reached 120 million CHF, exceeding the market’s expectation of 110 million CHF. Despite challenges from foreign exchange rates and tariffs, On Holding AG has updated its fiscal year 2025 revenue guidance, increasing it by 100 basis points to 28%. The company has also broadened its adjusted EBITDA margin range to 16.5%-17.5%.
Analysts from Needham have raised their price target for On Holding AG to $62, highlighting its strong growth potential, while Citi upgraded the stock from Neutral to Buy, albeit lowering the price target to $60. BTIG and Truist Securities have maintained their Buy ratings with price targets of $67 and $61, respectively, following the company’s decision to transition to a single-CEO model. Martin Hoffmann, currently Co-CEO and CFO, will become the sole CEO as Marc Maurer steps down. This leadership change is part of a planned transition and does not reflect any business challenges.
Additionally, On Holding has appointed several new senior executives, including a Chief People Officer and a Chief Innovation Officer, to strengthen its leadership team. Analysts such as KeyBanc Capital Markets and Telsey Advisory Group have expressed confidence in the company’s ability to achieve its goals under the new leadership structure. However, Jefferies has expressed concerns about potential weaknesses in shares and the risk of multiple compression if future financial results do not meet expectations.
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