On Holding AG: Strong Growth Potential and Strategic Positioning Justify Buy Rating

On Holding AG (ONON – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Thierry Cota CFA from Bank of America Securities reiterated a Buy rating on the stock and has a $75.00 price target.

Thierry Cota CFA has given his Buy rating due to a combination of factors that highlight On Holding AG’s growth potential and strategic positioning. The company is expected to achieve an organic sales growth of 35% for the fiscal year, surpassing previous guidance. This growth is supported by anticipated price hikes in the US and a favorable carryover growth boost in the second half of the year. Additionally, management’s comments suggest that current guidance may be conservative compared to the actual trend in orders.
Furthermore, On Holding AG’s strong brand traction and premium market positioning are expected to enhance both volume and price-mix. The company’s strategy of high operational expenditure and capital intensity is aimed at long-term revenue and EBIT scale potential, with plans to significantly increase store count and capital expenditure. This strategic approach is projected to drive substantial sales growth over the next decade, with estimates suggesting a rise from CHF2bn to over CHF10bn in sales. These factors, coupled with a raised price objective from $70 to $75, underpin the Buy rating.