Citi has upgraded On Holding (ONON, Financial) from Neutral to Buy, although it adjusted the price target from $65 to $60. The revision reflects challenges such as unfavorable currency impacts, anticipated weaker sales in the latter part of 2025, and a reduction in gross margins due to increased tariffs.
Despite these hurdles, On Holding remains a standout brand in the athletic sector, praised for its rapid growth and strong brand presence. The company's diverse geographical sales base and limited sourcing from China position it well to weather the current tariff uncertainties. According to Citi, these strengths make On Holding one of the most resilient brands in the industry.
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 $61.47 with a high estimate of $84.53 and a low estimate of $50.16. The average target implies an upside of 36.50% from the current price of $45.03. 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 1.9, 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 $51.97, suggesting a upside of 15.41% from the current price of $45.03. 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: March 04, 2025
- Net Sales: CHF2.32 billion, with a constant currency growth rate of 33.2%.
- Gross Profit Margin: 60.6% for the full year.
- Adjusted EBITDA Margin: 16.7% for the full year.
- Q4 Net Sales: CHF606.6 million, with a constant currency growth rate of 40.6%.
- Q4 D2C Share: 48.8%, with D2C growth of 48.2% on a constant currency basis.
- Q4 Wholesale Growth: 34.2% on a constant currency basis, reaching CHF310.4 million.
- Americas Q4 Net Sales: CHF385.1 million, with a constant currency growth rate of 33.9%.
- EMEA Q4 Net Sales: CHF147.4 million, with a constant currency growth rate of 33.1%.
- APAC Q4 Net Sales: CHF74.1 million, with a constant currency growth rate of 124.6%.
- Q4 Shoe Sales: CHF568.8 million, with growth driven by Cloudmonster and Cloudsurfer.
- Q4 Apparel Sales: CHF32.6 million, with a growth rate of 77.5%.
- Operating Cash Flow: CHF510.6 million, more than doubling year-over-year.
- Cash Position: CHF924.3 million at the end of 2024.
- Net Income Q4: CHF89.5 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- On Holding AG (ONON, Financial) reported a strong constant currency growth rate of over 33%, reaching CHF2.32 billion in net sales for 2024.
- The company achieved a gross profit margin of 60.6% and an adjusted EBITDA margin of 16.7%, indicating strong profitability.
- On Holding AG expanded its D2C share by more than 3 percentage points, enhancing its ability to connect directly with consumers.
- The brand's global awareness and popularity have increased significantly, with notable collaborations and awards, such as the Brand of the Year award by Footwear News.
- The company successfully launched 19 new retail stores in iconic locations, boosting regional awareness and digital momentum.
Negative Points
- Despite strong growth, On Holding AG faces macroeconomic uncertainties that could impact future performance.
- The company experienced operational challenges in 2024, particularly in the first half of the year, affecting its full potential.
- There is a need for continued investment in infrastructure and operational excellence to support long-term growth.
- On Holding AG's apparel segment, while growing, is slightly behind its mid-term target of reaching 10% of total revenue.
- The company anticipates potential incremental costs during the ramp-up phase of its fully-automated warehouse solution in Atlanta.
