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Investing.com - TD Cowen has lowered its price target on On Holding AG (NYSE:ONON) to $55.00 from $63.00 while maintaining a Buy rating on the stock. The company, currently trading at $42.97, shows impressive growth with revenue increasing 35.67% over the last twelve months.
The firm cited a changing valuation landscape, noting that On Holding is "now valued at an increasing premium to U.S. listed SMID cap peers in footwear" amid what it describes as an "intense" competitive environment. InvestingPro data confirms the premium valuation, with the company trading at a P/E ratio of 84.15, though analysis suggests the stock remains undervalued relative to its Fair Value.
Despite the price target reduction, TD Cowen expressed confidence in On’s business fundamentals, specifically highlighting the company’s "premium positioning" as a "competitive advantage" in the footwear market.
The research firm suggested management could potentially raise the high end of its adjusted EBITDA margin guidance range from the current 17% to 17.5%, indicating room for profitability improvement.
TD Cowen’s new $55 price target is based on a discounted cash flow analysis, representing 20 times the firm’s fiscal year 2027 enterprise value to EBITDA estimate and 32 times its adjusted non-GAAP earnings per share projection.
In other recent news, On Holding AG reported its Q2 2025 earnings, which fell short of market expectations. The company announced an earnings per share (EPS) of -0.12, significantly below the anticipated 0.28, resulting in a surprise of -142.86%. Revenue for the quarter was CHF 749.2 million, missing the forecasted CHF 816.29 million. Despite these results, Bernstein SocGen Group has reiterated an Outperform rating on On Holding, maintaining a price target of $70.00. This confidence follows meetings with the company’s CEO and investor relations team, where management emphasized sustainable growth through 2030. Bernstein highlighted expansion plans across lifestyle products, apparel, sporting goods retail channels, and direct-to-consumer stores. The firm described On Holding as "the strongest LT growth compounder in Global Sportswear," reflecting optimism about the company’s long-term prospects. These developments provide investors with important insights into On Holding’s current performance and strategic direction.
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