Swiss shoemaker On Holding (ONON) has been designated a top pick for 2024 and added to the Conviction List by Needham.
Analysts note that the current valuation fails to reflect On's distinctive growth profile, while increased short interest over the past six months suggests an opportunity. ONON stock is down approximately 30% from its peak in August.
Despite On's deeper holiday season discounts, analysts view the move as proactive amid competitive pressures, and management has incorporated these events into the 4Q guidance.
On Holding replaces Chewy (NYSE:CHWY) on the Conviction List, and Needham rates ONON as a buy with a price target of $40.
ONON stock rose 3.2% today.
Needham’s actions come just a day after ONON was also named Top Pick at Piper Sandler.
“We believe ONON's strong product pipeline will further increase credibility in run (where the brand has made significant progress in 2023) and expand wearing occasions with a solid lifestyle offering,” analysts said in a note.