KeyBanc optimistic on ONON stock, raises PT to $68

On Tuesday, KeyBanc Capital Markets provided an outlook on the footwear industry, highlighting brand performance and consumer spending trends ahead of the first-quarter earnings for 2025. The analysis was based on the results of their inaugural footwear survey, which aimed to understand brand and spending preferences, as well as to establish a baseline for future comparison. The survey revealed that comfort, price, and style are the top priorities for consumers when selecting new footwear, with promotions, innovation, and newness being key factors in the purchasing decision.

The survey indicated that 75% of respondents plan to make a footwear purchase in the next three months, and 30% expect to increase their spending on footwear in the same period. In-store shopping remains prevalent, with 71% of consumers typically purchasing from physical channels compared to 29% who buy digitally. Nike (NYSE:NKE) emerged as the favorite and most purchased brand over the last six months, while On, Adidas (OTC:ADDYY), HOKA, Skechers, and Crocs (NASDAQ:CROX) were identified as trending brands.

However, the survey also pointed to concerns over tariffs and the cost of living, particularly affecting lower- and middle-income consumers, who are expected to be more cautious with their spending in the coming months. In contrast, higher-income consumers appear more resilient. Younger consumers are anticipated to maintain stronger spending than older demographics, who plan to be more conservative.

In light of these insights, KeyBanc has adjusted its stock implications for several companies. ONON received an Overweight rating with a price target raised to $68, citing the brand’s premium positioning and minimal exposure to China tariffs as advantageous. WWW also holds an Overweight rating with a price target of $25, with its premium products and brand momentum seen as positive factors. According to InvestingPro data, WWW currently trades at $11.46, with analysts setting targets between $15 and $25. The company has maintained dividend payments for 38 consecutive years, demonstrating strong financial stability despite recent market volatility. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels.Want deeper insights? InvestingPro offers comprehensive analysis with 8 additional ProTips and detailed financial metrics for WWW, helping investors make more informed decisions. LULU, with an Overweight rating and a $400 price target, is expected to benefit from casual dress trends and a return to office environments.

REAL was given a Sector Weight rating, considered insulated from tariff exposure and likely to gain from higher-income consumer strength. CAL, also at Sector Weight, may face challenges from softer lower and middle-income spending but could benefit from consumers seeking value. DECK, rated Overweight with a $230 price target, may see mixed impacts due to the new Clifton 10 release and potentially slowing share for HOKA. Lastly, CROX, with an Overweight rating and a $120 price target, could face pressure due to its China sourcing exposure and the spending outlook for lower-income consumers. NKE, given a Sector Weight rating, might experience effects from a decrease in middle-income spending intentions, despite the appeal of its new products.

In other recent news, Wolverine World Wide (NYSE:WWW) reported a 3% year-over-year revenue growth for its ongoing businesses in the fourth quarter of 2024, with the Saucony brand achieving a notable 7% increase. The company’s adjusted EBITDA margin improved by 500 basis points due to cost savings and a better mix of full-price sales. Analysts at Baird upgraded Wolverine’s stock rating to Outperform, citing the company’s strategic positioning and the resilience of its Saucony brand. S&P Global revised Wolverine’s outlook to stable from negative, acknowledging improved operating performance and a significant reduction in leverage by the end of 2024. Stifel maintained a Buy rating with a $27 price target, highlighting Wolverine’s strategic vision and potential for growth, especially in the Merrell and Saucony brands. Meanwhile, UBS adjusted its price target to $26, maintaining a Buy rating despite short-term challenges, and expressed optimism about the company’s long-term growth prospects. Wolverine also announced a reorganization of its international management structure, which includes the departure of the President of the International Group, as part of its efforts to align global operations more closely with its key brands. These developments reflect Wolverine’s ongoing transformation and strategic initiatives aimed at enhancing its financial and operational performance.

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