On Thursday, Raymond (NS:RYMD) James made a notable change in its stance on shares of On Holding AG (NYSE:ONON), elevating the stock from an Outperform rating to a Strong Buy. Accompanying this upgrade, the firm also increased its price target for the company's shares from $52.00 to $63.00.
The adjustment in rating and price target follows On Holding AG's robust year-to-date performance, which includes their third-quarter results. The analyst at Raymond James highlighted the company's positive brand and product reception in the market as a key driver for the upgraded outlook. This sentiment is backed by checks conducted by the firm.
On Holding AG has demonstrated an ability to grow brand awareness, which Raymond James sees as a significant opportunity for the company. Moreover, the firm believes there is potential for On Holding AG to expand its wholesale operations effectively.
The analyst also expressed confidence in On Holding AG's ability to navigate operational challenges that may arise. This confidence, coupled with the strong year-to-date results, has led to the inclusion of On Holding AG on the Analyst Current Favorites® list, which is a curated selection of stocks expected to perform well.
In summary, Raymond James' revised view on On Holding AG is based on a combination of the company's strong performance to date and the potential for continued success in brand growth, wholesale expansion, and operational efficiency. The new price target of $63.00 reflects the firm's increased expectations for the stock's future performance.
In other recent news, On Holding AG has been the focus of several analyst upgrades and target price revisions following strong Q3 results. TD Cowen raised On Holding's stock price target to $60, maintaining a positive outlook based on impressive sales and EBITDA results. The company reported robust growth, particularly in the Direct-to-Consumer (D2C) segment, leading to a 33% year-over-year increase in net sales.
Williams Trading also upgraded On Holding from a Hold to a Buy rating and increased its price target from $40.00 to $60.00. This shift was influenced by On Holding's third-quarter performance which exceeded revenue and gross margin expectations.
Telsey Advisory Group, Goldman Sachs (NYSE:GS), BTIG, and Truist Securities also raised their price targets for On Holding, reflecting confidence in the company's business strategy and market position. On Holding's gross margin of 60.6% and an EBITDA margin of 18.9% for the third quarter exceeded expectations, underpinning the analyst's confidence in the company's growth trajectory.
In line with these developments, BTIG upgraded On Holding stock from Neutral to Buy, setting a price target of $64.00. The firm anticipates that On Holding will continue to see growth, especially as it benefits from a shift towards more DTC sales.
Finally, Goldman Sachs raised its price target for On Holding to $57, maintaining a buy rating. The firm revised its full-year 2024 and 2025 constant currency sales growth estimates to 31.9% and 25.4%, respectively, in light of these results.
InvestingPro Insights
On Holding AG's recent performance and Raymond James' upgraded outlook are further supported by key financial metrics and insights from InvestingPro. The company's revenue growth remains strong, with a 26.12% increase over the last twelve months as of Q3 2024, and an even more impressive 32.32% growth in the most recent quarter. This aligns with Raymond James' positive view on the company's brand reception and growth potential.
InvestingPro Tips highlight On Holding AG's impressive gross profit margins, which stand at 60.18% for the last twelve months. This strong profitability metric underscores the company's ability to maintain pricing power and efficiency in its operations, supporting Raymond James' confidence in On's ability to navigate operational challenges.
The stock's recent performance has been remarkable, with a 92.82% price total return over the past year and a 99.26% return year-to-date. This stellar performance is reflected in the stock trading at 95.22% of its 52-week high, indicating strong investor confidence in line with Raymond James' upgraded rating.
It's worth noting that InvestingPro offers 18 additional tips for On Holding AG, providing investors with a comprehensive analysis of the company's financial health and market position. These insights can be valuable for those looking to delve deeper into the investment potential of On Holding AG beyond the analyst upgrade.
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