ONON Stock Forecast & Price Target

On Holding AG has demonstrated robust growth in sales metrics, with the Americas region achieving a 26% increase in '24, following impressive gains of 51% and 81% in the prior two years. The company has significantly enhanced its direct-to-consumer (DTC) sales, which rose approximately 28%, contributing to an improved sales mix that bolsters gross margins through higher full-price selling and lower clearance rates. Additionally, On Holding is strategically expanding its footprint in high-growth markets, notably in Latin America, with plans for new retail locations and an augmented athlete roster to drive brand awareness and enhance market penetration.

On Holding AG faces a negative outlook primarily due to potentially profound downside risk associated with its high valuation multiples amid anticipated slower growth rates, with projections indicating revenues could drop 5% below FY26 targets. Additionally, the company is likely to experience revenue contraction from the previously expected 62.5% growth in 2025, exacerbated by tariff impacts on US imports and a significant currency headwind from the appreciating Swiss franc affecting its foreign exchange dynamics. Furthermore, adjusted EBITDA for FY26 is predicted to fall about 100 million CHF short of forecasts, limiting any potential for margin expansion beyond 2024, even if the company were to reduce its investment pace.