ONON Stock Forecast & Price Target

On Holding AG is positioning itself for strong growth through a robust increase in direct-to-consumer (DTC) sales, which rose approximately 28%, contributing to a higher sales mix and indicating a shift towards a more profitable sales channel. The company's strategic expansion in Latin America, highlighted by a 70% CAGR in South America, aligns with positive trends in the region’s running community, which supports future revenue potential. Additionally, there is a significant opportunity for EBITDA margin expansion beyond the current target of 18%, driven by improved operational efficiency and strategic marketing investments, underscoring a solid foundation for continued financial performance.

On Holding AG faces a challenging financial outlook due to anticipated gross margin contraction in 2026, driven by the full impact of tariffs on imports to the U.S. This is compounded by a significant foreign exchange headwind, with an expected impact of approximately 550 basis points as the Swiss franc appreciates against other currencies, particularly in the first quarter of 2026. Additionally, while apparel sales are projected to contribute positively in the long term, current performance remains weak, with sales forecasted to be under $200 million in 2025, further limiting overall margin improvements.