Key Moments
- Goldman Sachs upgraded On Holding AG (NYSE:ONON) to Buy from Neutral after a sharp de-rating over the past year.
- The bank raised its 12-month price target to $59 from $52, implying roughly 31% upside from the latest close.
- Goldman forecasts revenue, EBITDA, and EPS growth at a >20% CAGR through 2028E, driven by strong demand and margin expansion.
Rating Upgrade and Valuation Outlook
Goldman Sachs raised its rating on On Holding AG to Buy from Neutral. The bank said the stock’s valuation slide over the past year has created an attractive entry point.
Goldman also lifted its 12-month price target to $59 from $52. This target implies about 31% upside from the latest close.
Analyst Richard Edwards said the company should grow revenue, EBITDA, and EPS at a >20% CAGR through 2028E. He added that On’s premium position in sportswear should support both growth and margins.
Drivers Behind Goldman’s More Positive View
Edwards pointed to several reasons for the upgrade, starting with strong Q4 data. He cited high-frequency indicators that showed solid demand over the holiday season, including web traffic and strong sales in China.
The report noted that Tmall sales rose 102% year-on-year in the quarter. Goldman said this metric has often signaled future strength in the Asia-Pacific region, and it could indicate upside risk versus consensus.
Structural Tailwinds From Global Running Trend
Goldman also highlighted a long-term tailwind from the global running trend. The bank said consumer interest in running shoes is near record highs.
Edwards added that On’s running heritage and premium positioning should help the company benefit from this momentum. He noted that this remains true even as larger competitors focus more on running footwear.
Consumer Mix and Resilience
Edwards also said On’s customer base is a key advantage. He noted the brand tends to attract higher-income consumers, who are usually less affected by weaker sentiment in lower-income groups.
Margin Outlook and Forecast Revisions
Goldman said the market still underestimates the potential for margin improvement. It expects gross margin gains to continue in early 2026, driven by pricing, product mix, and cost improvements.
The bank also raised its Q4 constant-currency sales growth forecast to 36.2%. It lifted EBITDA projections as well, keeping its estimates above consensus.
Key Forecast and Valuation Metrics
| Metric | Previous | New | Comment |
|---|---|---|---|
| Rating (Goldman Sachs) | Neutral | Buy | Upgrade driven by de-rating and growth outlook |
| 12-month price target | $52 | $59 | Implies roughly 31% upside from latest close |
| Q4 constant-currency sales growth forecast | – | 36.2% | Revision reflects stronger demand signals |
| Tmall sales (Q4, year on year) | – | +102% | Seen as leading indicator for Asia-Pacific growth |
| Revenue, EBITDA, EPS growth (to 2028E) | – | >20% CAGR | Goldman’s growth expectation based on premium positioning |
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