NVIDIA launches Jetson Thor robotics computers for physical AI systems
On Wednesday, KeyBanc maintained a positive outlook on On Holding AG (NYSE:ONON), reiterating an Overweight rating and a $47.00 price target. The firm's assessment follows On Holding's performance, which surpassed expectations on all fronts, and the company's confirmation of its FY24 guidance, fueled by robust demand.
The company's success was attributed to increased brand recognition and sustained sell-through momentum. Direct-to-consumer (DTC) sales continued to expand their market presence, while wholesale channels saw improvements in the second quarter.
Despite some limitations in meeting U.S. demand due to the ongoing transition of the ATL warehouse, particularly in the DTC segment, On Holding experienced a surge in DTC growth during the latter part of the second quarter and the initial weeks of the third quarter.
KeyBanc expressed strong confidence in On Holding's strategic direction. The company's focus on brand marketing initiatives, collaborations, and managing a multi-channel retail approach were highlighted as key drivers of its continued success.
Additionally, On Holding's commitment to innovation, upcoming product launches, and the expansion of its apparel line are expected to solidify its position as a comprehensive athletic brand.
The firm's reiterated Overweight rating underscores its belief in On Holding's potential for sustained growth and market penetration. The positive assessment is backed by the company's solid financial performance and strategic initiatives aimed at expanding its brand and product offerings.
In other recent news, On Holding AG has seen several price target upgrades following promising financial results. TD Cowen raised the price target to $50, citing a robust product pipeline and expected growth in direct-to-consumer sales.
Truist Securities, Baird, and Goldman Sachs also increased their targets to $51, $50, and $50 respectively, maintaining positive outlooks.
Recent developments include a 27.8% increase in net sales to CHF 567.7 million and a significant rise in net income to CHF 30.8 million. William Blair highlighted On Holding's performance in its wholesale channel and the company's continued brand strength.
The company also announced the introduction of new technology, including LightSpray, and the upcoming launch of new products like the Cloudboom Strike and Cloudsurfer Next.
On Holding's management reaffirmed their commitment to accelerating EBIT growth, indicating a strong second half for the company. This projection is supported by a robust product pipeline, which is expected to drive both the direct-to-consumer strategy and overall business expansion. The company expects currency-adjusted sales growth of at least 30% and net sales of at least CHF 2.26 billion, with a gross margin around 60% for the full year 2024.
InvestingPro Insights
KeyBanc's positive stance on On Holding AG (NYSE:ONON) is further supported by the company's robust financial metrics and market performance. InvestingPro data shows a significant market capitalization of $13.16 billion, indicating the company's substantial presence in the market. The company's gross profit margin for the last twelve months as of Q1 2024 stands at an impressive 59.87%, reinforcing KeyBanc's confidence in On Holding's profitability and efficiency. Moreover, the company has demonstrated strong revenue growth of 33.66% over the same period, aligning with the analysts' expectations of sales growth in the current year.
InvestingPro Tips also reveal that On Holding holds more cash than debt on its balance sheet and has liquid assets that exceed short-term obligations, suggesting a stable financial position. Additionally, the company has seen a large price uptick over the last six months of 28.93%, which may interest investors looking for stocks with strong momentum. For further insights, there are 18 additional InvestingPro Tips available, providing a comprehensive analysis of On Holding's financial health and market potential.
As KeyBanc maintains its Overweight rating and $47.00 price target, these InvestingPro metrics and tips underscore the company's solid market position and growth prospects. On Holding's strategic initiatives and financial health appear to be in sync with the firm's optimistic outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.