On Holding Stock (ONON) Re-Rated, Analysts Go Different Ways

On Holding's stock (ONON) is facing increased scrutiny today, as a raft of analysts offer diverging perspectives on its growth trajectory and valuation. The stock, currently trading at $47.40, down 4.8% on the day after a strong gain yesterday, reflects the market's uncertainty amid contrasting assessments from the street.

The catalyst for this re-evaluation is a recent downgrade by Jefferies analyst Randal Konik, who lowered On Holding's rating from “Hold” to “Underperform” and slashed the price target from $50 to $40. In a research note, Konik expressed concerns that On Holding's rapid expansion may be approaching a peak, with 2025 potentially marking the apex of its sales growth rate.

The firm anticipates a deceleration in the company's U.S. retail footprint expansion, coupled with a moderation in sell-in as retailer orders gradually shift back to industry giant Nike (NKE) in 2026.

Jefferies also pointed to potential limitations stemming from On Holding's premium pricing strategy and relatively narrow product assortment. These factors, according to the firm, could constrain the company's total addressable market. The analyst projects sales and EBITDA estimates approximately 5% and 10% below consensus expectations, respectively, suggesting that the stock's valuation may face downward pressure as growth slows. The analyst argued that current valuation multiples may compress as growth decelerates.

However, this bearish outlook is not universally shared.

Barclays, for instance, remains optimistic, raising its price target on On Holding to $69 from $68 while maintaining an “Overweight” rating. The firm highlighted On Holding's strong second-quarter performance, emphasizing that price increases implemented in July should effectively offset tariff headwinds, ultimately driving sales and EBITDA margin expansion.

Morgan Stanley echoes this positive sentiment, increasing its price target to $65 from $62 and reiterating an “Overweight” rating. The firm lauded On Holding's Q2 outperformance and the subsequent “across-the-board” guidance raise, positioning the company as “one of the highest growth and strongest margin expansion stories in our coverage.” Morgan Stanley sees further upside to the raised guidance.

ONON rallied 8.9% yesterday on the back of earnings, yet today finds itself once again under pressure. With the stock now down 14.45% since the turn of the year, a meaningful shift in sentiment may take more than just the quarter.