Last week, Nike got a downgrade on its shares from Citibank, and now On Holding is downgraded, which is a tough move for one of the hottest footwear brands in the active lifestyle market to get negative attention.

Goldman Sachs downgraded On Holding AG (NYSE: ONON) shares to “Neutral” from “Buy” over concerns about a more competitive landscape and limited near-term upside despite strong brand momentum.

Goldman maintained its price target (PT) at $57.00 per share but also noted that with shares already up 227 percent since November 2022, the potential for further gains is now modest compared to its peers in the market.

This is the first downgrade for On Holding this year after TD Cowen maintained its “Buy” rating in early January and raised its PT to $66 per share. Telsey Advisory Group (TAG) maintained its “Outperform” rating in mid-January, and Morgan Stanley maintained its “Overweight” call the following week and upped its PT from $62 to $65 per share. Keybanc also maintained its “Overweight” call and bumped its PT from $60 to $68 per share.

Shares closed Wednesday, February 12, at $54.04 per share.

Goldman expects ONON to deliver a 22 percent compounded annual growth rate (CAGR) from 2024 to 2028, with EBIT margins improving 360 basis points to 12.3 percent of sales, driven by direct-to-consumer (DTC) sales growth of 28 percent annually. However, Goldman cited recent U.S. credit card data suggesting fourth-quarter DTC growth for the brand could trail consensus estimates, though the company said it does not anticipate a broader earnings miss.

Like the Nike reaction last week, investors and analysts did not appear to hop on the negative On Holding view as ONON shares dipped in pre-market trading on Wednesday, February 12, after the early morning note from Goldman, only to finish the day essentially flat.

“On’s competitors are increasingly focusing on winning back market share in running, potentially leading to a more competitive backdrop going forward,” Goldman Sachs wrote in its note.

Interestingly, Goldman pointed to growing competition in the running shoe market, with brands like Nike increasing their focus on reclaiming market share.

Meanwhile, Nike, Inc. received a vote of confidence of sorts from the analyst community this week as Williams Trading’s Sam Poser maintained his “Buy” rating on NKE stock and maintained his PT. However, he reduced earnings estimates for fiscal 2025 and fiscal 2026.

“We came away from last week’s meet and greet with Nike’s new CEO, Elliot Hill, and Nike’s CFO, Matt Friend, more confident of the company’s direction,” Poser and his team wrote in his Monday, February 10, note.

Williams wrote that the brand wound left by the former CEO is not fully appreciated by some investors, stressing that it will take time to heal and supporting new CEO Elliott Hill’s efforts to turn the mother ship around.

Williams advocated for more patience as product timelines prevent Nike from turning on a dime. The downgrade last week was reportedly due, in part, to the analyst losing patience with Nike and Hill.

“When we upgraded Nike to Buy in August, we wrote that it would take 15-18 months from when a new CEO was brought in for the company to get its mojo back,” Williams wrote. “Nothing at last week’s meeting changed that opinion. In fact, the meeting made us believe that positive inflections will begin to occur in the latter half of 2Q26, ~1 year after Elliot Hill took the helm at Nike.”

Image courtesy On Holding