Sunday, June 16, 2024

On Holding a new buy at Redburn on growth potential

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Shoes, fitness and exercise with a sports woman tying her laces before training, running or a workout. Hands, health and cardio with a female runner or athlete getting ready for an endurance run


  • Redburn Atlantic has initiated On Holding (NYSE:ONON) with a buy saying that the premium athletic shoes maker has become a discernible brand with a strong growth opportunity.
  • The firm has a $33 price target (~29% upside based on Monday’s close).
  • “Super-normal growth must logically slow, but sufficiently differentiated technology, brand heat, an interesting product pipeline and building success in performance supports continued sales outperformance,” the team wrote. “Existing presence across geographies and channel place the business well to capture the opportunity. Category expansion adds further optionality.”
  • Redburn added that EPS should compound at a 38% CAGR in 2023-2026.
  • On is “sufficiently differentiated and able to evolve such that the brand can continue to compete effectively and gain share from both established competitors and nimble newer entrants,” the team said.

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