Jefferies maintained its Underperform rating and $20 price target on On Holding AG, citing concerns about the company’s costly expansion into the competitive soccer market. The note followed a knee sprain suffered by brand ambassador Kylian Mbappé while he was wearing On’s prototype soccer shoes.
Jefferies’ concern is the strategic shift, not the injury itself. On is investing in soccer athlete endorsements and product development as growth in its core business slows and inventory rises.
Revenue growth was 36% six quarters ago. It has since slowed to 13%.