Source: Davit Kirakosyan
UBS Analysts Encourage Investment in On Holding AG
UBS analysts have reaffirmed a Buy rating for On Holding AG (NYSE:ONON), spotlighting the company’s vigorous growth path and vast untapped potential in the international athletic wear market. The Swiss performance running shoe and sportswear company has been steadily carving out a niche for itself, with prospects of becoming one of the fastest-growing athletic wear brands globally.
The Buy rating and $63 price target suggest that UBS has significant confidence in On Holding AG’s potential. UBS analysts anticipate that the company will continue to demonstrate strong performance, driven by its robust sales and earnings per share (EPS) growth. For the next five years, the Swiss company is predicted to have compound annual growth rates (CAGR) of 22% and 43% for sales and EPS, respectively. This forecast positions On to compete with some of the most rapidly expanding athletic wear brands worldwide.
Brand Awareness: A Crucial Driver for On’s Growth
A major component of On’s growth lies in its escalating brand awareness. According to the latest global athletic wear survey by UBS Evidence Lab, On’s aided brand awareness has impressively risen over the past four years. The awareness level has surged to 13% in 2024 from a mere 5% in 2021.
While this constitutes significant progress, On’s awareness level still lags behind major competitors such as Nike, which has 91% brand awareness, Puma with 74%, and Jordan at 59%. This disparity suggests a considerable opportunity for expansion and growth for On in the global athletic wear market.
Translating Brand Recognition to Market Share
The increasing recognition of the On brand is expected to translate into a greater share of the athletic wear market. UBS predicts that momentum will continue to build through 2025, leading to a substantial increase in On’s market share. With the brand’s growing recognition, more consumers are expected to associate On with high-quality athletic wear, leading to increased sales and market share.
Investor Confidence and Stock Performance
As On continues to deliver strong earnings and outperforms market expectations, investor confidence is expected to grow. This increased confidence will likely influence the stock’s performance, pushing it closer to the $63 target set by UBS. The positive outlook and high target price are indicative of UBS’s belief in On’s potential to become a significant player in the global athletic wear market.
UBS’s reaffirmation of a Buy rating for On Holding AG, coupled with its optimistic growth projections, underscores the high potential of the company. The growth trajectory, coupled with the brand’s untapped potential in the global athletic wear market, makes On an attractive prospect for investors.
In conclusion, On Holding AG is one to watch in the global athletic wear market. With solid sales and EPS growth predicted over the next five years, an increasing brand awareness, and a vast untapped potential, the company is well-positioned to become a formidable competitor in the athletic wear industry.