ONON Stock Forecast & Price Target

On Holding AG has demonstrated strong growth momentum, with a year-over-year revenue increase driven by a significant rise in direct-to-consumer (DTC) sales, which grew approximately 28%, contributing to a mixed sales increase of about 80 basis points to 39.6%. The company has successfully improved its gross margin through enhanced DTC penetration and effective operational execution, while it raised its fiscal year revenue outlook to 34% constant-FX growth, an increase from the prior estimate of at least 31%. Additionally, On Holding's revenue growth expectations for the upcoming fiscal years remain robust, with anticipated growth rates of 20-25% for FY26 and 15-20% for FY27, bolstered by strong brand awareness and product innovation.

The analysis indicates a negative outlook on On Holding AG's stock due to modestly lowered sales forecasts for FY25 and FY26, now estimated at 2,964 CHF and 3,681 CHF, respectively, attributed mainly to foreign exchange headwinds. There are significant risks highlighted, including potential slowdowns in consumer spending and product performance, which could lead to revenues falling short of expectations and pressure on profit margins in a competitive landscape. Additionally, anticipated contractions in gross margins, affected by one-time benefits and increased tariffs on U.S. imports, further contribute to the unfavorable financial outlook for the company.