On Holding AG Posts Strong Q1 Beat, 'Strong Traction' Among Footwear Brands, Analysts Raise Price Target

Shares of On Holding AG ONON were climbing in early trading on Wednesday after the company reported its first-quarter results on Tuesday.

Here are some key analyst takeaways.

KeyBanc Capital Markets Reiterates Overweight

Analyst Ashley Owens reiterated an Overweight rating while raising the price target from $60 to $68.

On Holding delivered a strong beat, with revenue growth of 43% year-on-year, "driven by the successful launches of the Cloudsurfer 2 and Cloud 6, coupled with strong traction in apparel," Owens said in a note. The company's adjusted EBITDA margin expanded by 27 basis points to 16.5%, "driven by improved execution across the supply chain," he added.

Although management raised their full-year guidance, this only reflected the first-quarter beat and left the expectations for the rest of the year unchanged, the analyst stated. On Holding plans product launches and other initiatives, "aiming to increase its differentiation in the footwear space while helping to offset most of the active 10% tariff rates," he wrote.

Check out other analyst stock ratings.

Needham Comments

Analyst Tom Nikic maintained a Buy rating while lifting the price target from $55 to $62.

On Holding's DTC channel grew by 42% in the quarter, "driven by increased brand awareness and successful new product introductions, along with a resonating apparel offering," Nikic said. The company indicated that trends have remained strong so far in the current quarter, he added.

Management expects the second quarter to be "really strong" for DTC, the analyst stated. "Wholesale accelerated to 39% growth in Q1 (strongest constant-FX growth since 3Q23), and unlike other footwear brands that have called out incremental caution regarding the channel for 2H, ONON has not seen a change in trend in the channel," he wrote.

ONON Price Action: At the time of publication on Wednesday, shares of On Holding had risen by 2.21% to $58.68.

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