ON Holding sees shares nearly doubling to $85 on 17% sales CAGR
UBS reiterates Buy rating on ON Holding with $85 target, forecasting shares could nearly double through P/E expansion after Q4 results showed resilient growth despite FX headwinds. Analysts project 17% sales CAGR, premium positioning driving stronger gross margins for reinvestments, and LightSpray capacity up 30x in South Korea.
1. Buy Rating and $85 Price Target
The firm has maintained a Buy rating on ON Holding and set an $85 price target, implying nearly 100% upside from current levels. P/E expansion is expected to be the primary driver of this potential share price rerating.
2. Growth Forecasts and Adjusted Guidance
Analysts forecast five-year CAGRs of 17% for sales, 19% for adjusted EBITDA and 28% for earnings per share. Foreign exchange challenges led to a 7% reduction in the fiscal 2026 EPS estimate, while 2027 and 2028 EPS projections remain unchanged and 2027 sales growth was increased by 50 basis points.
3. Margin Strength and Reinvestment Strategy
ON Holding’s premium brand positioning and supply chain innovations have driven stronger-than-expected gross margins. These margins provide funding to reinvest in marketing and product development, offsetting tariff and FX pressures and supporting long-term growth.
4. LightSpray Capacity Expansion
The company announced a new LightSpray factory in South Korea that boosts production capacity by 30 times ahead of a global launch this spring. This scale-up is expected to accelerate adoption of its robotically manufactured shoes and contribute to future revenue growth.