On Holding AG (ONON) PT Raised to $35 at Stifel, 'Brand momentum, higher revenue base, and incremental investment...justify a higher valuation, in our view.'

(Updated - March 21, 2023 1:57 PM EDT)

Stifel analyst Jim Duffy raised the price target on On Holding AG (NYSE: ONON) to $35.00 (from $31.00) while maintaining a Buy rating.

The analyst comments "FY4Q featured better than 80% growth in all regions and strong 76% growth from DTC. Perhaps most impressive, the 92% FY4Q growth was achieved with flat y/y marketing spend underscoring organic demand momentum. New product represented approximately 65% of FY4Q revenue reflecting diversification of the revenue base. Stifel Street high estimates see a significant lift in revenue outlook but largely unchanged Street high adj. EBITDA reflecting reinvestments in Marketing and Distribution capacity and automation that should help support momentum into FY24+. Notably, marketing includes the endorsement of women’s #1, Iga Świątek. We see the on-court brand representation in the Majors strategic to elevating both the Roger franchise and apparel offerings. Brand momentum, higher revenue base, and incremental investment in the business to support future growth justify a higher valuation, in our view. We are raising the 12 mos. TP to $35 from $31."

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