On Wednesday, Baird increased the price target for On Holding AG (NYSE: ONON) shares to $46, up from the previous target of $38. The firm maintained its Outperform rating on the stock.
This adjustment follows On Holding's recent financial report, which surpassed revenue and adjusted EBITDA expectations by 2.2% and 3.3%, respectively.
The company also reaffirmed its guidance for 2024, anticipating over 30% revenue growth excluding currency impacts and a 32-36% rise in adjusted EBITDA.
The company's management has identified several factors that are expected to contribute to accelerated growth in the coming months. These include strong consumer demand, a robust order book, strategic marketing timing, and new product launches. Based on these positive indicators, Baird has expressed a heightened confidence in On Holding's future performance.
In light of these developments, Baird has made modest increases to its adjusted EBITDA estimates for the years 2024 through 2026. The revised price target of $46 reflects Baird's enhanced confidence in the company's outlook and its potential for best-in-class growth metrics.
On Holding's ability to exceed financial expectations and maintain a positive outlook for the year ahead has been well-received by Baird. The company's strong performance and strategic plans for acceleration have led to the raised price target, signaling a bullish stance on the stock's future trajectory.
InvestingPro Insights
In tandem with Baird's optimistic outlook on On Holding AG (NYSE: ONON), InvestingPro data underscores the company's strong financial health and growth potential. With a market capitalization of $11.57 billion and a staggering revenue growth of 33.66% in the last twelve months as of Q1 2024, On Holding's financial trajectory aligns with Baird's raised expectations. The gross profit margin of nearly 60% during the same period highlights the company's efficiency in maintaining profitability amidst its expansion.
InvestingPro Tips further reveal that On Holding holds more cash than debt on its balance sheet, providing a solid foundation for sustainable growth. Additionally, the company is anticipated to see net income growth this year, a testament to its robust financial management and market strategy. With the stock trading near its 52-week high and analysts predicting the company will be profitable this year, the raised price target by Baird seems well supported.
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