On Holding Has 'Much More Room' For Growth Than Reflected In Guidance, Says Bullish Analyst

Shares of On Holding AG ONON rose in early trading on Tuesday, taking the stock higher by more than 111% year to date.

Given the brand’s current momentum, the company’s fiscal 2023 guidance appears conservative, reflecting a significant slowdown from its first-quarter results, according to KeyBanc Capital Markets.

The On Holding Analyst: Ashley Owens initiated coverage of On Holding with an Overweight rating and a price target of $42.

The On Holding Thesis: The company’s fiscal 2023 guidance reflects only 42% growth, versus 78% year-on-year growth generated in the first quarter, Owens said in the initiation note.

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On Holding has “the potential to deliver upside while driving margin expansion and mid-teens EBITDA in 2023,” the analyst stated. He added that there seems to be “much more room for ONON to grow as it integrates new technology within its DTC platform/expanded offerings.”

“ONON has a multiyear growth story sitting in front of it with several levers of opportunity (international, new products, distribution expansion) due to best-in-class innovation as well as increasing brand awareness,” Owens wrote.

ONON Price Action: Shares of On Holding had risen by 1.69% to $36.07 at the time of publication Tuesday.

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