Renato Neves, CFA
1 min read
This article first appeared on GuruFocus.
On Holding AG (NYSE:ONON), the Swiss maker of running shoes and sportswear, rose 4.70% in premarket after KeyBanc raised its price target to $42 from $37 and kept an Overweight rating.
KeyBanc said the third quarter slightly beat estimates, mostly because of wholesale timing, while direct-to-consumer sales fell short. Growth in Asia-Pacific slowed earlier than expected, which the firm sees as a deliberate choice to protect brand health. Management expects growth to pick up in the fourth quarter, led by direct-to-consumer sales, and KeyBanc said this year’s investments should start to give On more leverage on selling, general and administrative costs next year.
The firm said running innovation, apparel and new sports support the goals On set at its investor day, including high-teens growth and further EBITDA margin expansion in fiscal 2027. Other brokers are more cautious. Goldman Sachs Group Inc. (GS) cut its target to $41 from $44 on margin concerns while keeping a Buy rating, and Truist Securities kept a Buy rating with a $40 target but flagged weaker Asia-Pacific and direct-to-consumer trends.
