On Holding is Thursday's IBD Stock Of The Day as the Swiss athletic footwear and apparel maker leaves its imprint on both the track and the center court. ONON stock sprinted past a cup-with-handle buy point in afternoon stock market action.
ONON stock has regained its footing after selling off amid concern about excess inventory following its May 16 first-quarter earnings report. On Wednesday, Piper Sandler analyst Abbie Zvejnieks touted ONON stock as a "top growth idea" and bumped up her price target to 39 from 38.
Nike Hears On Running Footsteps
"ONON continues to lead on innovation with new performance product such as Cloudsurfer driving demand," she wrote. "We think the brand is taking more share with runners and lifestyle customers alike."
The recently launched Cloudboom Echo 3, billed as On Running's "fastest race-day shoe," has been winning rave reviews, she noted.
Zvejnieks highlighted On Running's strong representation on the podium at the July 2023 USA Track and Field Outdoor Championships. In the 1500-meter, 5000-meter and 10000-meter races, On Holding had four men and women place in the top two, compared with five top finishers for Nike.
ONON also landed on the podium at the French Open in June as new On ambassador and No. 1-ranked women's tennis player Iga Swiatek won the title. (Swiatek was knocked out of the Wimbledon semifinals on Tuesday, upended by unseeded Uraiknian Elina Svitolina.)
Zvejnieks sees potential for a $5 billion brand in the medium term vs. revenue of $1.4 billion in 2022 and adjusted EBITDA margins rising to the "high teens."
Amid concern about a softer retail environment, she sees ONON as a relatively safe bet. "We believe the premium positioning and performance nature of the product insulates the brand more from macro pressures compared to footwear peers."
ONON Stock
ONON stock sprinted 5.2% to 34.26, clearing a 33.67 cup-with-handle buy point. That put it in a buy zone that runs through 35.35.
ONON stock was the featured IBD Stock Of The Day on June 9, as shares made a bullish move past the 50-day moving average. On that same day, the IBD Leaderboard portfolio of elite stocks opened a position in ONON, promoting it from the Leaderboard watchlist.
On Thursday, Leaderboard added to its ONON position as the stock broke above the cup-with-handle formation.
Meanwhile, SwingTrader opened a position in ONON at 33.90, aiming for a 5%-10% profit.
ONON is also part of the flagship IBD 50 list of leading growth stocks.
