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

Shares of On Holding AG (NYSE: 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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