Investing.com -- Citi upgraded ON Holding to "Buy" from "Neutral" saying the Swiss athletic brand has a strong positioning which would help it navigate current tariff uncertainties and a weakening sales backdrop.
The brokerage lowered its price target to $60 from $65
The firm said ONON, one of the fastest growing brands in the athletic and softlines category, has very strong brand heat and a diversified global presence that could help it take market share from U.S. brands facing potential backlash, particularly in China.
ONON’s exposure to China sourcing is limited, with about 90% of production based in Vietnam, and the company is viewed as capable of passing through higher prices if tariffs increase.
Despite a lower 2025-26 earnings forecast because of the unfavorable FX, weaker second-half sales, and lower gross margins, Citi said ONON remains well-positioned for growth, modeling a five-year sales CAGR of 22.5% and EBIT margin expansion from 12.2% in fiscal 2024 to 15.8% in fiscal 2029.
Citi also reduced estimates and price targets on several other athletic names, including lowering AS’s price target to $30 from $36 while maintaining a "Buy" rating, and trimming forecasts for Deckers, Lululemon (NASDAQ:LULU), Nike (NYSE:NKE) and Under Armour (NYSE:UA) to account for the impact of tariffs and a potential global consumer slowdown.
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