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Tuesday, Needham analysts increased their price target on On Holding AG (NYSE:ONON) shares to $62.00, up from the previous $55.00, while sustaining a Buy rating. The firm’s analysts highlight On Holding as the highest-momentum name in their coverage, citing its strong growth potential and ability to exceed financial expectations. According to InvestingPro data, the company has demonstrated impressive gross profit margins and strong financial health, with 4 analysts recently revising their earnings estimates upward. The analysts are optimistic about the company’s "reverse hockey stick" outlook for the year, which suggests a potential upside to guidance.
On Holding AG reported a robust financial performance with revenues growing 40% on a constant-FX basis, surpassing the guidance which was set in the low-to-mid-30s. The company’s adjusted EBITDA reached 120 million CHF, topping the Street’s expectation of 110 million CHF. This financial success has led Needham to adjust their price target upwards. The company maintains strong fundamentals with a return on equity of 20% and holds more cash than debt on its balance sheet.
The company also updated its fiscal year 2025 revenue guidance, increasing it by 100 basis points to 28% on a constant-FX basis. However, due to the impact of foreign exchange and tariffs, On Holding AG has broadened its adjusted EBITDA margin range to 16.5%-17.5%, from the previously anticipated 17.0%-17.5%. Despite these headwinds, the analysts at Needham maintain their positive stance on the stock. For deeper insights into On Holding’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and 14 additional ProTips.
On Holding AG’s growth trajectory and financial results have demonstrated its capacity to outperform market expectations. The updated revenue guidance and the raised price target from Needham reflect the confidence in the company’s future performance and its ability to navigate through external challenges.
Investors and market watchers may see the revised price target as a sign of the company’s strong position within the industry. The "grind higher" name given by Needham suggests a steady and continuous upward movement in the stock’s value as On Holding AG continues to drive growth and take its numbers higher.
In other recent news, On Holding AG reported impressive financial results, achieving record net sales of over CHF 2.3 billion and a net income of CHF 242 million for fiscal year 2024. The company is undergoing a leadership transition, moving to a single-CEO model with Martin Hoffmann taking over as the sole CEO. This change follows the departure of Co-CEO Marc Maurer, who will remain until June 30, 2025, to ensure a smooth transition. Citi recently upgraded On Holding AG’s stock from Neutral to Buy, despite lowering the price target to $60, citing confidence in the company’s brand strength and ability to navigate market challenges. BTIG and Truist Securities also maintained Buy ratings, with price targets of $67 and $61, respectively, reflecting confidence in the company’s strategy and market position. Additionally, TD Cowen reaffirmed a Buy rating with a $64 price target, naming On Holding AG as their Europe Best Idea for 2025 due to its robust growth strategy. The company announced new senior leadership appointments, including a Chief People Officer and Chief Innovation Officer, to support its growth and innovation efforts. Despite the leadership changes, analysts from firms like KeyBanc Capital Markets and Telsey Advisory Group maintain positive outlooks, expecting a smooth transition under the new structure.
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