On Holding Leaps Ahead: Analyst Applauds Inventory Availability And EBITDA Margin Goals For Sportswear Brand

Telsey Advisory Group analyst Cristina Fernández reiterated an Outperform rating on the shares of On Holding AG ONON, raising the price target to $37 from $33.
Swiss performance sportswear brand On Holding is likely to gain from strong demand for products, inventory availability, and new product launches with very strong brand momentum.
The analyst applauds On Holding's solid pipeline of product launches, including Cloudsurfer (launched in late March), which features the new cushioning platform Cloudtec Phase, Cloudboom Echo 3, and a tennis assortment.
On Holding is expanding its wholesale doors gradually, the analyst notes.
The company's wholesale accounts have continued to place orders, whereas many other brands have experienced order cancellations as accounts work down the current inventory.
In 2023, the company also rippled the higher air freight usage last year, with a target EBITDA margin of 15% in 2023. On Holding is on track to hit its 2024 goal of 16%.
On Holding is scheduled to report first-quarter FY23 results before the bell on May 16, 2023.
The analyst expects 1Q23 sales growth of 63% to CHF 383 million, a gross margin expansion of ~650 bps Y/Y to 58.3%. Inventory is expected to end 1Q23 high, given the early arrival of Spring/Summer inventory.
Price Action: ONON shares are trading higher by 2.14% at $33.36 on the last check Thursday.
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