On Holding AG (ONON) is "making progress," according to UBS's latest global sportswear survey. The firm maintained a Buy rating and $51 price target on the stock in a note Thursday.
Analysts said the new survey data increases their conviction in the buy rating. As a result, the bank sees the stock outperforming.
"We believe On's continued focus on innovation, athletes, maintaining a premium brand image, and direct-to-consumer selling will lead to On delivering a 45% 5-yr. EPS CAGR," the analysts stated.
"Our view is this will surprise the market and drive stock outperformance. Plus, our checks suggest ONON is having a very solid Q4. We view ONON as Softlines' best growth stock and worthy of a premium multiple," they added.
UBS also believes that the market sees ONON as mainly a running shoe brand and doesn't fully appreciate the brand's potential to address a much larger market. "New survey data shows global consumers' impression of the On brand is improving," the analysts concluded.