ONON Stock Forecast & Price Target

On Holding reported a notable revenue growth of 22.6% year-over-year, reaching CHF 744 million, which was significantly above consensus expectations. The company's gross margin expanded by 180 basis points to 63.9%, indicating improved profitability amidst rising costs associated with marketing and selling expenses. Additionally, management's outlook for 2026 anticipates continuous growth in direct-to-consumer revenues and wholesale sales, projecting an increase of at least 23% in constant currency, further reinforcing the brand's strong market position.

On Holding's recent financial performance has shown a decline in key metrics, with a flattish EBITDA margin of 18.8% and an expectation of lower revenue estimates for 2026 at CHF 3.5 billion, down from previous forecasts. The company faces significant headwinds due to currency fluctuations, particularly the strength of the Swiss franc, which presents an estimated FX headwind of approximately 800 basis points. Additionally, challenging market conditions, including increased markdowns driven by a promotional environment and slowing direct-to-consumer demand, are expected to contract gross margins by over 50 basis points in 2026, further contributing to a negative outlook for the stock.