On Thursday, KeyBanc Capital Markets updated its outlook on On Holding AG (NYSE:ONON), increasing the price target to $68 from the previous $60, while maintaining an Overweight rating on the company’s shares. The firm’s analyst, Ashley Owens, expressed confidence in the brand’s trajectory towards 2025, citing several factors contributing to the positive assessment. This optimism appears well-founded, as InvestingPro data shows the stock has delivered an impressive 111% return over the past year, though current valuations suggest the stock may be trading above its Fair Value.
Owens highlighted On Holding’s strong brand momentum, relatively low awareness that suggests room for growth, and the increasing ’heat’ around the brand. The operational challenges faced by the company, including disruptions from European wholesale closures and distribution center headwinds, are expected to subside with the opening of a new distribution center in Atlanta this year. The company’s solid operational foundation is reflected in its impressive 60% gross profit margin and strong financial health score of GREAT according to InvestingPro metrics.
The analyst pointed out that On Holding’s product innovations, such as the Cloud 6 and updates across other key franchises, are likely to bolster consumer purchasing. This comes on the heels of a record year in 2024 for the company, with revenue growth reaching 26% in the last twelve months. Additionally, the recent overhaul of the apparel line is seen as a potential growth catalyst for the brand.
On Holding’s performance has continued to impress KeyBanc, with the company showing a knack for constant innovation, expanding market awareness, and leveraging superior technology. Management’s note about the momentum from the third quarter carrying into the holiday selling period further strengthens the firm’s positive outlook.
Owens believes that this momentum will extend into 2025, with On Holding set to deliver another year of robust revenue growth in the high-20s percentage range. The anticipation of new technology releases, notably the new version of its top-selling Cloud 6, and the expansion into key verticals such as apparel, tennis, and training, are expected to drive this growth.
In conclusion, KeyBanc’s raised price target is based on the company’s continued execution against its 2026 objectives and its favorable market positioning. The new price target of $68 is set at 29.5 times KeyBanc’s estimated 2026 EBITDA for On Holding AG. For deeper insights into On Holding’s valuation metrics and growth potential, investors can access comprehensive analysis and 18 additional ProTips through InvestingPro’s detailed research reports.
In other recent news, On Holding AG has been the subject of various analyst ratings and price target revisions. Citi maintained a Neutral rating on the company’s shares, citing strong positioning in the footwear market. Stifel analysts reaffirmed a Buy rating, noting the company’s sustained momentum through the holiday season. TD Cowen upgraded On Holding’s stock target and maintained its Buy rating based on a recent survey tracking brand preference trends. BofA Securities reinstated coverage with a Buy rating, highlighting the company’s robust sales trajectory. Lastly, UBS analysts retained their Buy rating, projecting a 22% sales Compound Annual Growth Rate (CAGR) over five years.
These recent developments reflect the positive trajectory for On Holding AG. The company’s co-CEOs have expressed confidence in their distribution and segmentation strategy, noting improvements over the past few years. They also highlighted consumer willingness to purchase higher-priced products. The co-CEOs’ commentary and the analysts’ ratings suggest a positive outlook for the company’s future.
On Holding AG’s strong position in the footwear market is expected to continue capturing market share, supporting robust double-digit top-line growth and margin expansion in the coming years. The company’s financial targets for the fiscal year 2026 appear increasingly achievable, with CHF 3.6 billion in revenue and EBITDA margins exceeding 18% projected. The company’s solid financial performance and promising growth prospects have led several analysts to recommend On Holding shares as a core holding for growth-oriented portfolios.
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