On Holding stock rating reiterated at Overweight by Piper Sandler

Investing.com - Piper Sandler has reiterated its Overweight rating and $65.00 price target on On Holding AG (NYSE:ONON), according to a recent research note. The company has demonstrated strong financial performance with impressive gross profit margins of 60.62% and revenue growth of 34.92% over the last twelve months.

The firm noted that On Holding shares have underperformed recently, declining 13% over the past month compared to a 2% drop in Piper Sandler’s coverage universe. The analyst attributes this weakness partly to "fast money rotation from more expensive names" ahead of a July 9th deadline, with a 13% increase in the number of shares shorted since mid-May. According to InvestingPro, the stock has shown strong momentum with a 35.28% return over the past year, despite recent volatility.

Despite the recent stock performance, Piper Sandler maintains that On Holding remains one of its favorite names in the footwear sector at current price levels in the low $50s.

The research note addressed investor questions and debates, suggesting that a healthier Nike (NYSE:NKE) represents a positive development for the overall athletic space.

Piper Sandler identified improvement in the running category as a potential risk for competitor Hoka, though running remains a relatively small vertical for Nike at an estimated less than 20% of sales.

In other recent news, On Holding AG has reported a remarkable first-quarter performance, with a 43% growth in constant currency revenue, driven by strong execution in key areas such as the Asia-Pacific region. Stifel analysts have responded by raising the price target for On Holding AG to $66, maintaining a Buy rating, while TD Cowen has increased their target to $63, also reiterating a Buy rating. Both firms highlight On Holding’s strong market position and growth potential, with TD Cowen noting its advantageous position due to innovative products and pricing power.

Meanwhile, Nike has caught the attention of Jefferies analyst Randal Konik, who reiterated a Buy rating with a $115 price target. Konik points out that Nike’s strategic moves, such as partnerships with Amazon (NASDAQ:AMZN) and URBN, along with its focus on innovation, are expected to bolster its market share. The analyst notes Nike’s advantage in the competitive sneaker market, emphasizing its broad consumer appeal and established brand identity.

Additionally, a significant merger between Dick’s Sporting Goods (NYSE:DKS) and Foot Locker (NYSE:FL) has been announced, with the transaction expected to close in the second half of 2025. Bernstein analysts suggest this merger could benefit brands like Nike by expanding their reach through Foot Locker’s extensive retail network. However, the analysts also caution that Nike might face pressure on margins due to increased reliance on a single partner.

Furthermore, On Holding has expanded its Board of Directors by appointing Helena Helmersson, former CEO of H&M Group, bringing her retail and sustainability expertise to the company. This move aligns with On Holding’s strategic direction as it aims to strengthen its global sportswear brand presence.

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