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On Holding (ONON) delivered Q1 2026 revenue of $1.07B, beating estimates by 22% with 64% gross margin and Asia-Pacific revenue up 44% year-over-year, but absorbed $70.43M in tariffs during the quarter.

KeyBanc cut its ONON stock price target to $43 from $58 due to tariff headwinds from Vietnam sourcing concentration, yet maintained an Overweight rating because the company’s 23%-plus growth guidance remains achievable and excludes potential tariff refunds.

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An analyst firm is stepping back on price, but not on conviction. KeyBanc lowered its price target on On Holding to $43 from $58 while keeping its Overweight rating, framing the move as a recalibration tied to tariff exposure rather than a break in the long-term growth thesis. For investors weighing the premium athletic name, the message is mixed: near-term headwinds are real, but the underlying brand momentum still has Wall Street's attention.

The price target cut on On Holding (NYSE:ONON) lands one day after the Swiss footwear brand delivered a sizable Q1 2026 beat. ONON stock closed at $33.83 on May 12, and the shares are down about 27% year to date (YTD).

Ticker

Company

Firm

Action

Old Rating

New Rating

Old Target

New Target

ONON

On Holding

KeyBanc

Price Target Cut

Overweight

Overweight

$58

$43

KeyBanc's reset reflects tariff-related cost pressure rather than a deteriorating brand. The firm continues to view On Holding's reiterated 23%-plus constant currency growth guidance as conservative if current demand trends persist. That language is unusually bullish for a downgrade-in-target call.

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The other nuance is potential tariff relief. KeyBanc flagged that tariff refunds could serve as incremental upside if and when they materialize, a scenario On Holding's own guidance explicitly excludes.

On Holding is a premium Swiss sportswear brand competing with Hoka, Nike (NYSE:NKE), and other performance labels in running and lifestyle. On Holding's Q1 2026 revenue came in at $1.07 billion, beating estimates by 22%, with gross margin of 64%.

Asia-Pacific is the standout, with revenue up 44% year-over-year. On Holding also disclosed approximately $70.43 million in IEEPA tariffs absorbed during the quarter, with co-founders David Allemann and Caspar Coppetti stepping back in as Co-CEOs.

Tariff exposure is the central issue. Roughly 90% of On Holding's footwear and 65% of apparel are sourced from Vietnam, and the company's full-year outlook embeds a 20% incremental tariff rate on Vietnam imports.

The valuation backdrop also matters. ONON stock trades at a forward P/E ratio of 24x, with a consensus analyst target of $56.42. KeyBanc's $43 marks one of the more cautious Street views, though the Overweight tag keeps the firm in the bull camp.

For prudent investors, KeyBanc's call captures both sides of the On Holding stock debate. The bull case rests on premium pricing power, accelerating Asia-Pacific growth, and apparel revenue that rose 45%. Customers paying $150 to $200 for performance shoes tend to absorb tariff pass-through better than mass-market buyers.

The On Holding bear case rests on Vietnam concentration, a beta of 2.087 that has translated into sharp drawdowns, and growth deceleration from 36% in 2025 to a guided 23%-plus this year. The Overweight rating signals that KeyBanc sees this as a near-term recalibration, not a thesis change, leaving moderate position sizing as a sensible posture while tariff clarity develops.

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