ON Holding Q1 earnings seen as potential catalyst for valuation re-rating, says UBS Proactive uses images sourced from Shutterstock
ON Holding (NYSE:ONON)’s upcoming first quarter results could act as a catalyst for its valuation multiple, according to UBS, which expects solid underlying performance for the shoe-maker despite cautious investor sentiment.
UBS said its channel checks indicate healthy revenue momentum in the first quarter, with sales growth likely to come in roughly 200 basis points ahead of expectations. The firm also sees scope for a modest uplift to full-year 2026 sales growth guidance, excluding currency impacts, by about 100 basis points.
According to UBS, a report of that nature could support a re-rating of the stock’s current valuation multiple, particularly given the prevailing cautious sentiment. A stronger print may also help ease investor concerns following the recent CEO transition announcement.
Investor sentiment toward the stock remains subdued, UBS said, even as shares have risen about 8.5% over the past three months, outperforming the S&P 500. The bank attributed the cautious tone in part to worries that leadership changes may signal weakening fundamentals.
As a result, UBS believes expectations for the quarter are relatively modest, including roughly a 100 basis point sales beat, in-line margins, and no changes to full-year guidance.
Data from UBS Evidence Lab and other industry indicators suggest demand remained strong through the quarter. Global website traffic rose about 20% year over year, while European consumer spending on the brand increased 35%. US search trends also showed low-teens percentage growth, supporting the view that momentum persisted into 2026.
UBS cautioned that risks include the potential for higher oil prices to pressure margins more than expected and the possibility that the market’s expectations heading into the release may be higher than assumed. Options markets are pricing in a roughly 10.5% move in the shares, broadly in line with historical volatility.
The bank maintains a ‘Buy’ rating and $85 price target on On Holding, implying significant upside from current levels of $35.
They argued that the company’s current valuation, around 18 times forward earnings, sits at a significant discount to historical averages and could re-rate if growth trends continue to exceed expectations.
The company is set to report its Q1 earnings on May 12.