On Tuesday, On Holding AG (NYSE:ONON) saw its share price target increased to $36.00 from $35.00 by TD Cowen, with an Outperform rating being maintained. The adjustment comes despite a noted slowdown in the fourth-quarter Americas sales, which grew by 19% year-over-year, a deceleration compared to the third quarter and 600 basis points below TD Cowen's estimates.
The sports apparel company experienced a 15% decline in its share price today, influenced by weaker third-party data for February and March. Nevertheless, On Holding's full-year 2024 revenue guidance is optimistic, projecting a 30% increase excluding foreign exchange impacts, which surpasses the company's long-term plans.
The firm's analysts believe that sales in the Americas are poised for acceleration throughout the fiscal year 2024. The new price target is based on a multiple of 27 times the estimated earnings per share (EPS) for fiscal year 2025 and 17 times the forecasted adjusted enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) for the same period, which includes stock-based compensation (SBC).
On Holding's positive guidance for fiscal year 2024, which suggests a robust growth trajectory, has been a key factor in the maintained Outperform rating and the marginal price target lift. Despite the recent share price drop, the outlook for the company's performance in the Americas and beyond remains promising according to TD Cowen's analysis.
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