Piper Sandler has maintained a positive outlook on On Holding AG (NYSE: ONON), reiterating an Overweight rating and a $56.00 price target.
The firm's confidence in the brand has been bolstered by recent findings from its 48th semi-annual Taking Stock with Teens Survey.
The survey revealed a shift in consumer preferences, particularly among upper-income teens, with apparel spending increasing marginally and footwear experiencing a slight decline.
According to the survey, while Nike (NYSE:NKE) remains the top favorite brand among all teens, it has lost 4 percentage points in brand share year-over-year, with a notable decrease in popularity among female teens. Upper-income females, in particular, showed a significant drop in Nike's mindshare. This comes as Nike undergoes a turnaround period under new management, which is expected to take some time.
Amidst the shifting landscape, On Running, a brand under On Holding AG, has seen a rise in popularity. It climbed to the third spot as the favorite athletic footwear brand among upper-income female teens. Another brand that saw an increase in favorability was UGG, which ascended to the fifth position among top footwear brands, marking a 6-point increase year-over-year.
In other recent news, Deckers Outdoor (NYSE:DECK) Corporation has been the subject of several significant developments. The company reported a robust 22% increase in Q1 FY2025 revenues, largely due to a 30% surge in revenue from the HOKA brand and a 14% rise from the UGG brand, leading to an upward revision of the company's annual profit forecast. The firm also underwent a 6-for-1 stock split, which analysts from Williams Trading and TD Cowen endorsed by adjusting their price targets to reflect the new valuation.
Deckers Outdoor Corporation has seen varied responses from analysts. UBS maintained a positive outlook on the company, raising the price target to $226 from $225 and keeping a Buy rating, citing the strong performance of the Hoka brand.
However, Seaport Global Securities downgraded Deckers from "Buy" to "Neutral", expressing concerns about diminishing momentum for the HOKA and UGG brands. Truist Securities increased the stock price target for Deckers to $205.00, expressing confidence in the company's continued strong performance.
InvestingPro Insights
To complement the analysis of On Holding AG's rising popularity among teens, let's take a look at some financial insights for Deckers Outdoor Corporation (NYSE:DECK), the parent company of UGG, which was also mentioned as gaining favorability in the survey.
According to InvestingPro data, Deckers has shown impressive financial performance, with a market capitalization of $24.57 billion and a strong revenue growth of 20.3% over the last twelve months as of Q1 2023. This aligns with the increased popularity of UGG among teens as reported in the survey.
InvestingPro Tips highlight that Deckers has been highly profitable, with a high return over the last year and a strong return over the last five years. This suggests that the company's strategy, including the positioning of brands like UGG, has been effective in driving financial success.
It's worth noting that Deckers is trading at a P/E ratio of 30.74, which may be considered high by some investors. However, an InvestingPro Tip indicates that the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting potential value for investors.
For readers interested in a deeper dive into Deckers' financials and future prospects, InvestingPro offers 14 additional tips that could provide valuable insights for investment decisions.
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