2023-07-25 11:54:29 ET
On Holding AG ( NYSE: ONON ) broke to a new high after attracting another bull rating from Wall Street. KeyBanc Capital Markets started coverage on the athletic footwear and apparel company with an Overweight rating.
Analyst Ashley Owens highlighted that On ( ONON ) continues to grow its brand awareness due to grassroots campaigns as well as its innovative and unique product line. Notably, Owens thinks ONON's FY23 guidance looks to be conservative because it implies +42% year-over-year growth to mark a significant slowdown from the Q1 results.
"We believe that ONON has the potential to deliver upside while driving margin expansion and mid-teens EBITDA in 2023. While we model growth slightly above consensus for FY23/FY24, we believe there’s much more room for ONON to grow as it integrates new technology within its DTC platform/expanded offerings. The brand has seen explosive growth (+69% in 2022, +70% two-year CAGR)—even with this, ONON has a multiyear growth story sitting in front of it with several levers of opportunity (international, new products, distribution expansion) due to best-in-class innovation as well as increasing brand awareness."
KeyBanc assigned a price target of $42 on ONON based on a 32X multiple off the 2024 EV/EBITDA estimate. The stock now has 11 Buy-equivalent ratings from sell-side analysts in comparison to just one Hold-equivalent rating and two Sell-equivalent ratings.
Seeking Alpha analyst Caffital Research is more cautious on On Holding and set a Sell rating earlier in July. Caffital Research reminded investors that On has yet to prove it can deliver high margins.
Shares of On Holding ( ONON ) were up 1.69% at 11:52 a.m. and carved out a new all-time high of $36.59 earlier in the session.
More on On Holding:
- On Holding: A Potential Long-Term Compounder
- More articles on On Holding from Seeking Alpha analysts
- Growth metrics on On Holding
- Recent options trades on On Holding
- Seeking Alpha's Quant Rating for On Holding
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On Holding jogs to new high after KeyBanc joins the bull camp