ON Holding AG Downgraded to Outperform by Raymond James Amid FX and Tariff Pressures

Raymond James downgraded ON Holding AG to Outperform from Strong Buy due to near-term macro pressures, including currency volatility and higher tariffs. The firm cut earnings estimates for 2025 and expects slower wholesale growth in Q2, which will weigh on margins and reported growth. However, it remains bullish on ONON as a long-term story, citing strength in its direct-to-consumer business and growth opportunities in newer segments like apparel and the Asia-Pacific region.

Raymond James has downgraded ON Holding AG (ONON) to Outperform from Strong Buy, citing near-term macro pressures such as currency volatility and higher tariffs. The firm has also reduced its earnings estimates for 2025 and expects slower wholesale growth in Q2, which will likely impact margins and reported growth. Despite these near-term concerns, Raymond James remains bullish on ONON as a long-term investment, highlighting the strength of its direct-to-consumer business and growth opportunities in newer segments like apparel and the Asia-Pacific region [1].

In the past three months, ONON has received 45 Buy Ratings, 1 Hold Rating, and 0 Sell Ratings from 20 analysts, with an average price target of $66.79 [1]. The highest price target is $75.00, while the lowest is $60.00, indicating a broad range of analyst expectations. The average price target represents a 25.73% increase from the last price of $53.12 [1].

Analysts from various firms, including BTIG, Bernstein, Morgan Stanley, Piper Sandler, and Bank of America Securities, have maintained their Buy or Outperform ratings on ONON, citing robust financial performance, strong brand, and growth potential. However, some analysts have raised concerns about potential overvaluation due to a high P/E ratio and mixed technical indicators [1].

Looking ahead, ONON's next quarter's earnings estimate is $0.24, with a range of $0.14 to $0.36, and its sales forecast is $881.93M, with a range of $855.79M to $963.04M [1]. The company has a history of outperforming its overall industry in terms of earnings and sales estimates.

In conclusion, while Raymond James' downgrade reflects near-term concerns, ONON's long-term prospects remain strong, supported by analyst consensus and robust financial performance. Investors should closely monitor the company's earnings and sales reports to gauge the impact of the downgrade and assess the potential for long-term growth.

References:
[1] https://www.tipranks.com/stocks/onon/forecast