On Holding Ag's Strong Q1 Performance Sets Stage for Accelerated Growth

Barclays's Adrienne Yih raised their price target on On Holding Ag (NYSE: ONON) by 5.3% from $38 to $40 on 2024/05/15. The analyst maintained their Strong Buy rating on the stock.

Yih's price target increase comes on the heels of On Holding Ag's impressive Q1 2024 earnings report, which surpassed expectations and highlighted outstanding sales growth across all channels, locations, and products. The company reported earnings per share (EPS) of $0.38, beating the Zacks Consensus Estimate of $0.16 by a significant margin and showing a remarkable 137.5% increase compared to Q1 2023's $0.16. Additionally, revenue for the quarter reached $581.41 million, surpassing the Zacks Consensus Estimate by 4.66% and showing a substantial 28% increase compared to Q1 2023's $454.13 million.

With a gross profit margin of 59.7% and an EBITDA margin of 15.2%, both improvements over Q1 2023's figures, On Holding Ag's Q1 performance demonstrates the company's strong execution of its long-term strategy to become the leading global sportswear brand. The company's management has provided encouraging guidance for FY 2024, expecting revenue growth of 30%, a gross profit margin of 60%, and an EBITDA margin of 16.0% to 16.5%.

Co-CEO & CFO Martin Hoffmann expressed his satisfaction with the Q1 results, stating, "Q1 was a very strong start to the year and a further step in the execution of our long-term strategy to be the most premium global sportswear brand. We are thrilled to have exceeded our expectations and surpassed the half-billion net sales mark in a single quarter." Hoffmann also highlighted the strength of the company's direct-to-consumer (DTC) channel, which contributed to a strong gross profit margin in Q1, nearing the mid-term target set a few months ago.

Co-Founder and Co-CEO Caspar Coppetti echoed Hoffmann's enthusiasm, emphasizing the record net sales and profitability achieved in Q1. Coppetti also pointed out the company's ongoing success in capturing market share at key running routes globally. He expressed excitement for the remainder of the year, noting the upcoming athlete success stories and the company's focus on executing its strategic priorities with precision.

In addition to Barclays's Adrienne Yih, several other analysts also updated their ratings and price targets for On Holding Ag on 2024/05/15. Truist Securities's Joseph Civello raised their price target by 13.3% from $30 to $34, while maintaining a Hold rating on the stock. Morgan Stanley's Alex Straton raised their price target by 14.3% from $35 to $40 and maintained their Strong Buy rating on the stock. Evercore ISI Group's Michael Binetti raised their price target by 7.5% from $40 to $43 and maintained their Buy rating on the stock.

These analyst updates reflect the overall positive sentiment surrounding On Holding Ag. In fact, 100% of top-rated analysts currently rate the stock as a Strong Buy or Buy, with no analysts considering it a Hold or recommending selling the stock.

The consensus forecast among analysts is that On Holding Ag's upcoming year will deliver earnings per share (EPS) of $0.7. If these analysts' predictions hold true, the company's next yearly EPS will see a remarkable 62.3% increase on a year-over-year basis.

Since the release of On Holding Ag's latest quarterly report on 2024/05/14, the stock price has increased by 0.3%. Over the past year, the stock has shown a solid 8.9% gain. However, during this period, On Holding Ag has trailed behind the broader market, as the S&P 500 has experienced a substantial 28.3% increase.

On Holding Ag, headquartered in Zurich, Switzerland, develops and distributes athletic footwear, apparel, and accessories. With a presence in 55 countries and partnerships with 6,000 retailers, the company has established itself as a significant player in the global sports industry. On Holding Ag holds a dominant 40% market share in the running shoe market in Switzerland and 10% in Germany. The company was founded in 2010 and has since been dedicated to delivering cutting-edge and sustainable innovations to athletes and consumers worldwide.

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