On Friday, Telsey Advisory Group adjusted its price target for On Holding AG (NYSE:ONON) shares, a Swiss performance sportswear company, from $40.00 to $47.00, while maintaining an Outperform rating on the stock.
The firm recognized the appointment of actress Zendaya as On's first global ambassador as a positive move for the brand's image. This follows the recent news on April 29 regarding the collaboration with FKA Twigs, a singer-songwriter, who has taken on the role of Creative Partner for On's new training vertical.
The firm noted that On is elevating its marketing efforts as it grows into a larger global brand, merging the realms of performance and lifestyle. On's products, although initially focused on running, have gained popularity for everyday use due to their comfort and style.
The partnership with high-profile ambassadors is part of On's strategy to diversify its offerings, including entering new markets such as tennis and enhancing its apparel line with better fit and a broader style selection.
The introduction of On's tennis apparel capsule has shown early signs of success, with several items quickly selling out on the company's website.
However, the impact of the new training apparel collection, set to launch in September 2024, remains to be seen. Retail partnerships are also a significant part of On's growth strategy.
Last week, major retailers Foot Locker (NYSE:FL) and Dick's Sporting Goods (NYSE:DKS) commented positively on On's momentum and expansion of its presence in their stores.
Furthermore, On is actively working with retail partners to enhance the in-store experience for customers. This includes an expanded footwear wall at Bloomingdale's Soho location, mirroring the presentation found in On's own retail stores, and a combined apparel and footwear display at Dick's new House of Sports store in Boston. These efforts are aimed at strengthening On's brand visibility and appeal in the competitive sportswear market.
In other recent news, Swiss performance sportswear company On has announced significant developments. The company announced the addition of Laura Miele, President of Electronic Arts (NASDAQ:EA) Entertainment & Technology, to its Board of Directors.
Miele's vast experience, particularly in managing international teams and shifting company operations to digital delivery, is expected to bolster On's governance.
On has also reported first-quarter sales that exceeded expectations, largely attributed to robust demand in the direct-to-consumer segment. The company reaffirmed its fiscal year 2024 guidance, with net sales projected to reach around CHF 2.29 billion, indicating a 28% increase from previous projections.
Several analyst firms have adjusted their price targets for On Holding AG shares, following the company's strong first-quarter results. KeyBanc maintained an Overweight rating with a $40.00 price target, while Truist Securities increased its price target to $34 from $30, maintaining a Hold rating.
Baird raised its price target to $46 from $38, maintaining an Outperform rating, and Telsey Advisory Group increased its price target to $40 from $37, also retaining an Outperform rating.
In other company news, On is preparing for significant brand events, including new product technology launches aligned with the upcoming Paris Olympics.
The company's strategies are expected to enhance brand recognition and accelerate revenue growth. Furthermore, On has been focusing on larger, less frequent marketing campaigns and strengthening its partnerships to amplify its presence during product launches and major sporting events.
InvestingPro Insights
As On Holding AG (NYSE:ONON) continues to make strides in expanding its brand presence with high-profile partnerships and a diversified product range, the financial metrics provided by InvestingPro offer a deeper look into the company's performance and market position. With a robust market capitalization of $13.45 billion, On Holding AG is trading at a high P/E ratio of 88.64, reflecting investor confidence in the company's future growth prospects. This is further supported by a significant revenue growth of 33.66% over the last twelve months as of Q1 2024, emphasizing the company's expanding market reach and successful product launches.
An impressive gross profit margin of nearly 60% highlights On's ability to maintain profitability in the competitive sportswear industry. Additionally, the company has demonstrated strong returns, with a 50.5% one-year price total return, signaling robust investor enthusiasm. InvestingPro Tips for On Holding AG include the fact that the company holds more cash than debt on its balance sheet and is expected to see net income growth this year. For investors seeking a comprehensive analysis, there are 21 additional InvestingPro Tips available, which can be accessed with a subscription. To enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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