Telsey Advisory Group has reiterated its Outperform rating on On Holding AG (NYSE: ONON) and maintained a $65.00 price target as the athletic footwear and apparel company approaches its next earnings release. Trading at $47.44, On sits on InvestingPro’s Most Undervalued list according to InvestingPro analysis cited by analysts, and the company is scheduled to report fourth-quarter results on March 3.
In its recent note, Telsey projects that On will deliver fourth-quarter 2025 sales of CHF 728 million, which represents 20.0% growth and sits slightly ahead of consensus expectations of CHF 724 million, or 19.4% growth. The firm expects gross margin to expand by 35 basis points year-over-year to 62.5% for the quarter and forecasts adjusted EBITDA of CHF 120 million, implying an EBITDA margin of 16.4%.
Telsey highlights On’s trailing twelve-month gross profit margin of 62.4% as an indicator of the company’s strong profitability characteristics. That level of gross margin is noted by InvestingPro as an "impressive" outcome and is among the platform’s ProTips referenced by subscribers.
Looking beyond the quarter, Telsey’s outlook for full-year 2026 assumes continued top-line strength. The firm models 25% constant currency sales growth for 2026, which is above On’s November guidance of at least 23% growth. Despite that optimistic top-line view, Telsey looks for gross margin contraction of roughly 40 basis points to 62.1% in 2026, attributing the decline to tariff impacts even as On benefits from high full-price selling and lower freight expenses.
On the profitability side, Telsey expects adjusted EBITDA margin expansion of about 20 basis points to 18.7% in 2026, driven primarily by leverage in selling, general and administrative spending. The firm also points to several product and distribution initiatives that it sees supporting growth: planned product rollouts including Cloudmonster 3 and Cloudrunner 3, initial commercialization of LightSpray beginning in March, an annual plan to open 20-25 new stores, wholesale door growth of 5%-6% per year, deeper apparel penetration, and further expansion in underpenetrated markets such as Asia-Pacific, parts of Europe, and Latin America.
Analyst sentiment from other brokerages remains mixed but generally supportive. UBS retains a Buy rating with a $85 price target, citing strong consumer momentum and a potential sales beat in the fourth quarter. Bernstein reiterated an Outperform rating and a $70 target, pointing to strong operational results despite On’s stock decline in 2025. Stifel continues to rate the stock as Buy with a $60 price objective following the company’s decision to split the CEO and CFO roles and the appointment of Frank Sluis as CFO effective May 2026. KeyBanc, while keeping an Overweight rating, trimmed its price target to $58 from $68 and cited recent stock underperformance as a factor in the adjustment.
Those analyst moves reflect a mix of conviction in On’s brand momentum and caution about valuation and near-term performance. Investors will have an immediate catalyst in the March 3 earnings release to assess whether the company meets Telsey’s above-consensus sales forecast and the margin assumptions that underpin the firm’s $65 target.
With the earnings date less than a week away, market participants will be watching reported sales, gross margin variation versus the firm’s expectations, and the company’s commentary on tariffs, freight costs, and the rollout cadence for new products and store openings. These items will be key to validating Telsey’s projections for 2026 and the broader analyst positioning summarized above.