On Friday, Wedbush maintained its Outperform rating on On Holding AG (NYSE: ONON) and increased the price target to $38.00, up from the previous $33.00.
"We remain bullish, as we believe the company had a strong Holiday season and remains one of the strongest-momentum brands in our coverage", a Wedbush analyst noted.
The company, known for its performance running shoes and apparel, is anticipated to report fourth-quarter results before the market opens on Tuesday, March 12. Wedbush believes that the guidance provided for Q4 will likely be exceeded, marking another significant outperformance by On Holding AG.
Looking forward, expectations are set for On Holding AG to present initial fiscal year 2024 guidance that meets or surpasses current analysts' projections. There is also a sense of anticipation that the company will continue its pattern of exceeding expectations and subsequently raising its outlook as the year progresses, a trend it has consistently demonstrated since its initial public offering in 2021.
In light of these expectations, Wedbush has revised its earnings per share estimates for fiscal years 2023 and 2024 to $0.46 and $0.76, respectively, up from the earlier estimate of $0.43 for FY23 while maintaining the FY24 estimate. The revision of the price target to $38 is attributed to the extension of the base year for the target to fiscal year 2025.
InvestingPro Insights
As On Holding AG (NYSE: ONON) gears up to release its fourth-quarter results, the company's financial health and market performance provide a compelling narrative for investors. With a market capitalization of $10.18 billion, On Holding AG stands out with its robust revenue growth and impressive gross profit margins. The latest data, as of the last twelve months leading up to Q3 2023, shows a remarkable revenue growth of 63.57%, with gross profit margins at a strong 59.1%. This financial vigor underpins Wedbush's confidence in the company's ability to exceed its Q4 guidance.
Investors may find the PRONEWS24 coupon code particularly timely, as it offers an additional 10% off a yearly or biyearly Pro and Pro+ subscription to InvestingPro. This is an opportunity to access a wider array of "InvestingPro Tips," of which there are 16 available for On Holding AG, including insights on the company's cash position relative to debt and expectations for net income growth this year.
One notable "InvestingPro Tip" is the company's low Price/Earnings to Growth (PEG) Ratio of 0.65 for the last twelve months leading up to Q3 2023, which suggests that the stock may be undervalued relative to its earnings growth potential. However, it's important to note that the company is trading at a high Price/Earnings (P/E) ratio of 98.89, indicating a premium market valuation.
Despite the stock experiencing a significant drop over the last week with a -7.59% price total return, the broader trend over the year has been positive, with an increase of 43.33%. This volatility is a critical consideration for investors, as highlighted by another "InvestingPro Tip," which points out the stock's tendency for significant price movements.
For investors looking to delve deeper into the financial metrics and strategic analysis of On Holding AG, InvestingPro offers comprehensive tools and insights. The additional "InvestingPro Tips" can be a valuable resource in making informed investment decisions.
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