Citi upgrades On Holding stock amid backlash against American brands

In the current economic climate, American brands face significant challenges, particularly in countries like China. On April 28, 2025, Citigroup announced an upgrade for On Holding, a Switzerland-based sneaker company, citing its unique position to benefit from the backlash against American companies like Nike and Lululemon among Chinese consumers. The firm raised its buy rating despite lowering its price target from $65 to $60 per share, indicating a forecasted 33% upside from its recent closing price of $45.03. Citigroup analyst Paul Lejuez pointed out that the stock has already slipped over 15% in 2025. Despite the challenges posed by global economic shifts and currency headwinds, as well as broader issues like President Donald Trump's tariffs, Lejuez expressed confidence in On Holding’s strong market momentum. As a brand from Switzerland, On Holding is viewed more positively in key markets outside of the U.S., giving it a potential competitive edge. The analyst noted that its geographically diverse sales base and limited exposure to sourcing in China positioned the company favorably compared to American brands, which are suffering from a decline in consumer sentiment, especially in Asia-Pacific (APAC) and Europe, the Middle East and Africa (EMEA). Lejuez cautioned about the overall slow down of global consumer spending, emphasizing the negative effects on companies perceived as American brands with significant sales in China. The anticipated disruptions resulting from ongoing trade tensions may empower On Holding to capture market share from established American competitors. The company’s growing brand reputation and pricing power could enable it to manage the costs associated with tariffs more effectively than its peers, allowing it to maintain accessibility and appeal among consumers during these turbulent times. In conclusion, Citigroup’s upgrade signifies a broader awareness of changing consumer attitudes, particularly regarding national origins of brands, and highlights how alternative brands like On Holding can leverage this moment. As global trade dynamics continue to shift, local perceptions of brands will influence purchasing behavior, which presents opportunities and challenges for companies in the apparel and footwear sectors.