ONON Stock Forecast & Price Target

On Holding AG is experiencing significant growth, with sales increasing by 36% to CHF 607 million, and is forecasting a revenue increase of approximately 27% to at least CHF 2.94 billion for FY25 due to strong early-year demand and a robust pipeline. The company has successfully captured a larger market share among consumers under 35, with notable performance in footwear, which accounts for 95% of sales, showing a 34% increase, while apparel and accessories recorded even higher growth rates of 76% and 84%, respectively. Additionally, strategic partnerships and brand activations have enhanced On's global brand presence, reflected in an increased direct-to-consumer sales share of 48.8% in the fourth quarter and ongoing strong full-price sell-through rates.

On Holding AG faces significant challenges that contribute to a negative financial outlook, primarily due to macroeconomic trends indicating a potential recession, which may lead to lower consumer demand as disposable income declines. The company's reliance on third-party suppliers exposes it to supply chain disruptions that could adversely affect operating results, compounded by pressures on margins from increased selling, general and administrative (SG&A) costs and the risk of diminished brand perception due to rapid expansion. Additionally, anticipated deceleration in footwear growth and unfavorable adjustments in revenue growth and EBITDA margins further underscore the financial risks, particularly in a climate of volatility affecting consumer spending and confidence.