Analysts at Raymond James upgraded On Holding on the stock’s recent pullback and their continued belief in On’s growth potential. The investment firm lowered its rating on Deckers Outdoor despite remaining “bullish” on the stock.
The changes were made ahead of earnings reports scheduled for the coming weeks.
Analyst Rick Patel upgraded On Holding to “Strong Buy” from “Outperform” on his belief that the stock’s recent pullback has been overdone. The stock is down 16 percent since its fourth-quarter report was released on March 3.
He wrote, “We attribute the decline to concerns about CEO Martin Hoffman stepping down and concerns about higher oil prices. Management change often creates investor skittishness. But we think ONON remains in good hands with existing Co-Founders remaining in control.”
Patel’s said On’s growth should remain strong, with checks indicating accelerating strength across Google Trends and mobile app data. He further said foreign exchange “should be less of a drag,” and pricing power can offset tariff and freight headwinds.
Patel wrote, “For revenue and margins, we see tailwinds from price increases from July 2025, innovation being introduced at higher price points, and the outperformance of DTC. Apparel was softer-than-expected in 4Q on tougher compares, but we see 1Q performing better as ONON typically releases newness in 1Q and 3Q. We think ONON is on track to beat 2026 expectations, with guidance for more than 23 percent revenue growth (ex-FX) and flattish EBITDA margins this year.”
He lowered his rating on Deckers to “Outperform” from “Strong Buy” based on valuation and kept his price target at $133. Shares of Deckers closed at $107.71, up 2 cents, in trading on Thursday. Patel noted that Deckers’ stock is up 11 percent since its fiscal third-quarter report on January 29.
“To be clear, our Outperform underscores our still-bullish view — we are not turning bearish, simply shifting our rating to ONON, which has underperformed recently despite our expectation of strong fundamentals,” said Patel.
For Deckers’ fiscal fourth quarter, Patal sees the company reporting better-than-expected results, supported by conservative guidance and continued positive momentum from the third quarter. The analyst said, “While Hoka was guided to grow 13-14 percent, we see room for mid-teens or better growth on momentum and easier comparisons. Hoka U.S. DTC inflected to positive in F3Q (a quarter earlier than we thought), and we expect F4Q should grow at a similar or better pace; comparisons for this segment will be easy through F1H27.”
Ugg was guided to flat in the fiscal fourth quarter on a wholesale timing shift. Patal sees potential for Ugg to grow, given its DTC strength and the benefit of cold weather in January and February, as well as his team’s favorable channel checks, which include signs of reduced discounting. Patel said gross margins “will be pressured by tariffs in F4Q and through F1H27, but tariff mitigation and stickiness of recently lower rates would be upside drivers. We also think SG&A can be better controlled than what the guide implies for F4Q. For FY27, our estimates are roughly in line with the Street on top line and margins; we see DECK guiding conservatively to set up beats/raises for the year.”
Image courtesy On Holding
