Stifel has increased its price target for On Holding (ONON, Financial) from $57 to $66 while maintaining a Buy rating on the stock. According to the analyst, the company's impressive fiscal first-quarter performance has solidified its position as a leader in the sector, justifying the stock's premium valuation. Although foreign exchange fluctuations pose challenges to the reported outcomes, they do not affect the brand's underlying strength, as noted by the analyst in a post-earnings report.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 26 analysts, the average target price for On Holding AG (ONON, Financial) is $64.92 with a high estimate of $83.44 and a low estimate of $50.88. The average target implies an upside of 13.14% from the current price of $57.38. More detailed estimate data can be found on the On Holding AG (ONON) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, On Holding AG's (ONON, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for On Holding AG (ONON, Financial) in one year is $51.77, suggesting a downside of 9.78% from the current price of $57.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the On Holding AG (ONON) Summary page.
ONON Key Business Developments
Release Date: May 13, 2025
- Net Sales: CHF726.6 million, a 43% year-over-year increase on a reported basis and 40% on a constant currency basis.
- Gross Profit Margin: 59.9%, up from 59.7% in Q1 2024.
- Adjusted EBITDA Margin: 16.5%, up from 15.2% in Q1 2024.
- Net Income: CHF56.7 million.
- Direct-to-Consumer (D2C) Sales: CHF26.9 million, a 45.3% increase year-over-year on a reported basis.
- Wholesale Sales: CHF449.7 million, a 41.5% increase year-over-year on a reported basis.
- Cash Position: CHF871 million at the end of Q1 2025.
- Capital Expenditure: CHF12.1 million, representing 1.7% of net sales.
- Inventory: CHF399.3 million at the end of the quarter.
- Apparel Sales: CHF38.1 million, a 93.1% increase year-over-year.
- Shoe Sales: CHF680.9 million, a 40.5% increase year-over-year.
- Regional Performance - EMEA: CHF168.6 million, a 33.6% increase on a reported basis.
- Regional Performance - Americas: CHF437.4 million, a 32.7% increase on a reported basis.
- Regional Performance - Asia Pacific: CHF120.6 million, a 130.1% increase on a reported basis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- On Holding AG (ONON, Financial) reported net sales exceeding CHF725 million, reflecting a 40% growth on a constant currency basis.
- The company's direct-to-consumer business showed strong performance, contributing to an increased gross profit margin of 59.9%.
- The launch of new products like the Cloudsurfer 2 and Cloud 6 has been successful, with the Cloud 6 being the largest product launch ever for the company.
- On Holding AG (ONON) has been recognized by Fast Company as the number one most innovative company in the design category for its LightSpray technology.
- The company is expanding its global presence with new store openings and strategic partnerships, contributing to increased brand awareness and market share.
Negative Points
- The company faces uncertainty due to potential incremental tariffs in the United States, which could impact planning and market dynamics.
- Foreign exchange volatility, with key operating currencies depreciating against the Swiss franc, poses a challenge to profitability.
- Despite strong performance, the company remains cautious about macroeconomic uncertainties that could affect consumer demand in the second half of the year.
- The automation project in the Atlanta warehouse is still in the testing phase, with full load testing yet to be completed.
- The transition in leadership, with Martin Hoffmann taking over as sole CEO, may present challenges as the company adjusts to new management dynamics.
