ONON: Beat And Raise Execution Will Support Premium Multiple Ahead

Analysts have nudged our fair value estimate for On Holding modestly higher to approximately $62 from about $61, reflecting slightly stronger long term revenue growth expectations, a marginally lower discount rate, and confidence in the company’s ability to sustain premium valuation multiples despite mixed but generally constructive changes in Street price targets.

Analyst Commentary

Street research following the Q3 report reflects a generally constructive stance on On Holding, with most firms acknowledging strong execution, durable growth, and robust brand momentum, even as some temper price targets to better reflect sector wide multiple compression and competitive risk.

Bullish Takeaways

• Bullish analysts highlight Q3 as another beat and raise quarter, reinforcing confidence in management’s ability to execute on guidance and support premium valuation multiples.
• Improving margin visibility, including leverage from scale and favorable mix, is cited as a key driver behind upward target revisions and supports the case for sustained earnings growth.
• Commentary points to broad based strength across EMEA, APAC, and the Americas, with Q4 growth expected to remain in line with or better than Q3, underpinning long term top line forecasts.
• Continued full price sell through, limited pushback on price increases, and a well managed launch calendar are seen as indicators that the brand can maintain pricing power and support a premium valuation versus peers.

Bearish Takeaways

• Bearish analysts, while often still positive on fundamentals, are trimming price targets to account for sector wide valuation de rating, which could cap multiple expansion even if growth remains strong.
• Some research flags that On Holding now trades at a widening premium to SMID cap footwear peers, which raises questions about how much of the growth story is already embedded in the share price.
• Planned expansion into team sports introduces execution and competitive risk, given entrenched positions from larger incumbents, which could increase perceived risk and weigh on valuation if returns are slower than expected.
• Macro uncertainty and a tougher discretionary spending backdrop may amplify volatility around high growth names like On Holding, with any slip in execution or guidance potentially prompting sharper multiple compression.

What's in the News

• On Holding raised its full year 2025 net sales guidance and now expects 34% year over year growth on a constant currency basis, up from at least 31% previously (Key Developments).
• At current spot rates, the updated outlook corresponds to reported 2025 net sales of CHF 2.98 billion, compared with the prior guidance of CHF 2.91 billion (Key Developments).

Valuation Changes

• Fair Value Estimate has risen slightly, moving from approximately $61.40 to about $62.08 per share.
• Discount Rate has fallen marginally, edging down from roughly 8.21% to about 8.20%.
• Revenue Growth has increased slightly, with the long term assumption ticking up from around 22.04% to approximately 22.04%.
• Net Profit Margin has decreased modestly, easing from roughly 11.91% to about 11.82%.
• Future P/E has risen slightly, increasing from about 34.9x to roughly 35.3x forward earnings.