UBS: On Holding AG's (ONON) Growth and Margin Expansion Will Positively Surprise Market

UBS analyst Jay Sole reiterated a Buy rating and $85.00 price target on On Holding AG (NYSE: ONON).

The analyst commented, "We think On's continued focus on innovation, performance, athletes, sports, and direct-to-consumer selling, while maintaining a premium brand position will lead to industry-leading sales growth and earnings beats. ONON’s +26% y/y ex-FX sales growth and exceptionally strong margin results in 1Q reinforce our conviction in this view. We forecast On delivering 18%, 20%, and 29% 5-yr. sales, adjusted EBITDA, EPS CAGRs, respectively, and expect strong growth to continue from there. Our view is this type of growth outlook justifies a 33x FY2 P/E vs. just ~16x today. We think ONON’s growth and margin expansion will positively surprise the market and boost the stock’s P/E. On’s brand is gaining heat with younger consumers. Mgmt. highlighted, in 1Q, the share of 18-24 year olds significantly grew within the company’s DTC customer base. We believe On’s expanding reach with this younger demographic is an underappreciated LT growth driver."

For an analyst ratings summary and ratings history on On Holding AG click here. For more ratings news on On Holding AG click here.

Shares of On Holding AG closed at $33.83 yesterday.

You May Also Be Interested In

• Tesla Crash Into Texas Home Now Under Federal Safety Probe - WSJ
• A.O. Smith executive chairman to retire, CEO to assume chairman role
• Jefferies explains Alphabet (GOOGL) selloff: 1. Exec departures 2. Mag7 softness ahead of AI IPOs 3. Multiple normalization