On Holding AG (ONON): On targets the next leg of growth with high-teens sales CAGR and 22%+ EBITDA margin by 2029

Overview

This Investor Day update examines On Holding's newly issued 2029 financial framework. HSBC emphasizes that the sales target is in line with consensus, while the profitability objective is modestly ahead, supported by growth across existing product verticals, expansion into football and golf, and operating leverage.

Core views

On has issued 2029 financial targets after surpassing the 2026 goals it set at its 2023 Investor Day. It targets high-teens constant-FX sales CAGR through 2029 and at least CHF5.6bn of sales in 2029, both broadly aligned with Visible Alpha consensus of 18% growth and CHF5.6bn in sales. The company also targets gross margin of at least 65%, compared with 65.8% consensus, and adjusted EBITDA margin of at least 22%, ahead of consensus at 21.3%. The latter implies adjusted EBITDA CAGR above 20% from 2026 to 2029, with meaningful SG&A leverage identified as the key profitability driver. Management expects growth across all verticals. Run, sneaker and apparel are the immediate pillars expected to contribute disproportionately, while entry into football and golf is intended to provide additional support. At the Investor Day in Zurich, management planned to frame delivery around innovative products, validation through athletes and talent, premium customer experiences, high-quality earnings, and a culture of innovation and excellence. For 2026, On reiterated guidance for low-20s constant-FX sales growth, versus consensus of 22%, gross margin of at least 65%, matching consensus, and adjusted EBITDA margin of 19.5%-20.0%, versus 19.9% consensus. Guidance excludes a one-off US tariff-refund benefit of up to USD65m, or CHF53m, expected in Q3 2026 and benefiting reported gross profit. For Q3 2026, it expects around 17% constant-FX sales growth, below consensus of 19%. The company ended H1 2026 with CHF1.2bn of net cash. Alongside the long-term targets, the board authorized its first share-repurchase program, allowing repurchases of up to USD1bn of Class A ordinary shares through the end of 2029.

Analysis framework

HSBC compares On's newly announced sales, margin and earnings-growth targets with Visible Alpha consensus, then links the financial framework to management's stated product-category growth pillars, SG&A leverage, balance-sheet position and capital-return authorization. It separately compares reiterated 2026 and Q3 guidance with consensus expectations.

Methodology notes

• Valuation methods

  Target-price-based stock rating bands

  HSBC states that its target price reflects its assessment of current value and is expected to be reflected in the market price over six to 12 months; a Buy classification generally applies when the target is more than 20% above the current share price.

• Corporate Fundamentals and FinanceOperating and Financial Leverage Analysis

  SG&A leverage

  The report attributes the targeted improvement in adjusted EBITDA margin primarily to meaningful SG&A leverage as sales scale.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• On Holding AG (ONON.US)

  Primary covered company; its 2029 target framework and capital-return authorization are the report's focus.

  Strengths

  High-teens constant-FX sales-growth target through 2029, 22%+ adjusted EBITDA margin target, CHF1.2bn net cash at end-H1 2026, and planned expansion across products and sports categories.

  Weaknesses

  Q3 2026 constant-FX growth guidance of around 17% is below consensus of 19%.

  Comparison

  2029 sales target is in line with Visible Alpha consensus, while the 22%+ adjusted EBITDA margin target is above consensus of 21.3%.

Key data

• 2029 net sales targetAt least CHF5.6bnIn line with Visible Alpha consensus of CHF5.6bn.
• 2026-29 constant-FX sales growthHigh teens CAGRVersus Visible Alpha consensus of 18%.
• 2029 gross margin target65%+Versus consensus of 65.8%.
• 2029 adjusted EBITDA margin target22%+Versus consensus of 21.3%.
• 2026-29 adjusted EBITDA CAGRAbove 20%Versus consensus of 20%.
• 2026 outlook: constant-FX sales growthLow-20s rangeVersus consensus of 22%.
• 2026 outlook: adjusted EBITDA margin19.5%-20.0%Versus consensus of 19.9%.
• Q3 2026 constant-FX sales growth outlookAround 17%Versus consensus of 19%.
• Net cash at end-H1 2026CHF1.2bnSupports the authorized capital return.
• Share-repurchase authorizationUp to USD1bnFor Class A ordinary shares through end-2029.
• US tariff-refund benefitUp to USD65m or CHF53mExpected in Q3 2026; excluded from guidance and benefits reported gross profit.

Impact & implications

HSBC presents the new framework as a long-term growth and profitability roadmap: sales expectations are broadly consistent with consensus, while the 22%+ 2029 adjusted EBITDA margin target is ahead of consensus. Product expansion, SG&A leverage, net cash and the repurchase authorization are the principal elements supporting this outlook.