Truist Securities adjusted its price target for On Holding AG (NYSE:ONON), a footwear and apparel company, to $58.00, an increase from the previous target of $51.00. The firm reaffirmed its Buy rating for the company's shares.
On Holding has experienced significant market performance, with shares rising approximately 19% since the second quarter earnings report, outpacing the S&P 500's gain of around 5%. The improvement in On Holding's stock value is attributed to a noticeable acceleration in its direct-to-consumer (DTC) business in the United States.
Despite encountering some logistical challenges due to the automation project at their Atlanta distribution center, On Holding's operations are reported to have shown improvement. The firm's underlying demand trends are considered robust, supported by increased brand awareness following the Olympics, a partnership with celebrity Zendaya, and the introduction of new and popular products in both footwear and apparel sectors.
The analyst from Truist Securities highlighted that these factors contribute to the company's early growth opportunities, prompting the adjustment of the price target to $58. This change reflects the firm's confidence in On Holding's continued growth trajectory and market position.
In other recent news, On Holding AG has witnessed a series of upgrades and revisions in the wake of its impressive financial performance. BofA Securities upgraded On Holding from Underperform to Neutral following a significant 29% increase in the company's second quarter revenue. The firm also adjusted the price target for On Holding to $55, up from $21, in response to this growth.
Stifel, maintaining its Buy rating, raised its price target for On Holding to $59, reflecting the company's successful market performance and growth potential. Piper Sandler assigned an Overweight rating with a price target of $52, acknowledging On Holding's strong growth and overcoming of operational challenges.
KeyBanc reiterated an Overweight rating and a $47 price target, attributing the company's success to increased brand recognition and sustained momentum.
TD Cowen increased its price target to $50, citing a robust product pipeline and expected growth in direct-to-consumer sales. On Holding reported a 27.8% increase in net sales to CHF 567.7 million and a substantial rise in net income to CHF 30.8 million.
On Holding's management also reaffirmed its commitment to accelerating EBIT growth, indicating a strong second half for the company. 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 of 2024.
InvestingPro Insights
On Holding AG's (NYSE:ONON) strong market performance, as highlighted in the article, is further supported by recent financial data and insights from InvestingPro. The company's revenue growth of 28.49% in the last twelve months as of Q2 2024 aligns with the article's mention of robust demand trends and increased brand awareness. This growth is complemented by an impressive gross profit margin of 59.97%, indicating efficient cost management despite the logistical challenges mentioned.
InvestingPro Tips reveal that On Holding is expected to see continued growth in net income and sales this year, which supports Truist Securities' optimistic outlook and increased price target. The company's strong financial position is evident from its cash reserves exceeding debt, providing flexibility for future investments in product development and marketing initiatives.
While the stock's P/E ratio of 84.23 might seem high, the PEG ratio of 0.33 suggests that the company's valuation could be justified by its growth prospects. This aligns with the article's emphasis on On Holding's early growth opportunities.
For investors seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for On Holding, providing a deeper understanding of the company's financial health and market position.
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