On Holding AG: Bullish Investor Day Targets Reinforce Buy Rating Conviction

UBS First Read on On Holding AG (ONON US): ONON provided a new 3-year outlook, with a 2029 sales target of at least CHF 5.6B (close to $7B) at current FX, representing a high-teens CAGR vs. its 2026 revenue guidance, driven by outsized contribution from run, sneaker and apparel categories supported by entry into new sports categories, Football and Golf. The company expects gross margin to exceed 65% throughout FY26-29 and adjusted EBITDA margin to rise to 22%+ by 2029, above its FY26 guidance of 19.5-20.0%, implying over 20% EBITDA CAGR during FY26-29E. ONON also announced a share repurchase authorization for up to $1B of Class A ordinary shares through end-2029. UBS believes the investor day "bar" was a mid-teens sales CAGR and that some investors were concerned new sports could weigh on EBITDA margins, so these targets likely provide a lift to sentiment, and the buyback should enhance cash returns and the EPS growth algorithm. UBS rates ONON Buy with a US$73 price target based on ~29