On Thursday, TD Cowen, a financial services firm, raised its stock price target for On Holding AG (NYSE:ONON), a Swiss performance sportswear brand, from $60.00 to $65.00, while maintaining a "Buy" rating. The adjustment follows a series of meetings in Boston with On Holding's Co-CEOs Marc Maurer, Martin Hoffmann, and Jerrit Peter, which left the analysts more assured about the company's sustained growth prospects.
The analysts at TD Cowen highlighted the significant increase in brand awareness for On Holding in the United States, noting it has doubled since the previous year as of the third quarter.
The growth in recognition is seen as a high return on the marketing investment, which constituted 12% of sales in the fiscal year 2024, doubling since fiscal year 2022. The brand's awareness now approaches 20%, and it continues to grow even in markets where it is already well-established.
The company's innovative approach, combining performance with style, has been cited as a key factor in its credibility and premium market positioning. This has enabled On Holding to collaborate with luxury brands and personalities, such as Zendaya and FKA Twigs, particularly to increase its visibility among the 18-24 age demographic.
On Holding's strategy avoids defining a total addressable market, as the brand has been successful in establishing new price points in various segments, including lifestyle and tennis, which previously did not exist. The upcoming release of the Cloud6, a product that emphasizes comfort, recycled content, and durability, is expected to showcase the company's pricing power.
The financial services firm's revised price target suggests that On Holding's market capitalization could surpass $20 billion, supported by its leadership in the premium footwear space and a high return on invested capital distribution model.
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