On Holding AG (ONON) PT Raised to $50 at Goldman Sachs

Goldman Sachs analyst Richard Edwards raised the price target on On Holding AG (NYSE: ONON) to $50.00 (from $47.00) while maintaining a Buy rating.

The analyst comments "On Holding reported 2Q24 adj. EBITDA of CHF 90.8mn, driven by net sales of CHF 567.7mn, +27.8% yoy and +29.4% cFX. Group gross margin came in at 59.9%, +40bps yoy, with adj. EBITDA margins of 16%. Net working capital -5.3% yoy at the end of 2Q24 (+14.3% relative to 4Q23). By geography, 2Q24 EMEA cFX sales grew +22.2%, Americas +25.8% and APAC +84.7%. By channel, DTC +28.1% and Wholesale +27.6%. FY24 guidance reiterated: cFX sales growth of at least 30%; Net sales guidance of at least CHF 2.26bn using current spot rates (from CHF 2.29bn); Gross margin of around 60%; Adj. EBITDA margin between 16%-16.5%. Implications: Based on today's results, we forecast FY24E/25E cFX sales growth of +30%/+26.1% (from +31.5%/+26.2%), assuming gross margins of 60.2%/60.7% (unchanged), driving FY24E/25E adj. EBITDA margins of 16.5%/17.5% (unchanged) and EBITDA of CHF 373mn/496mn (from CHF 379mn/509mn). We also update our FY24E/FY25E depreciation charge to 4.5%/4.4% of sales (from 4.3%/4.2%), FY24E/FY25E capex to 3%/3.5% (from 2.8%/4%), and long-run SBC assumptions to 3% of sales (from 2.5%). Lastly, we decrease our FY24E net finance income estimate by c.CHF 30mn to c.CHF 57mn driven by unrealised foreign exchange losses, resulting in adj. FY24E diluted EPS to CHF 0.58 (from CHF 0.67). Detailed financial forecasts within. TP to $50, Buy."

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