Investment Rating - The industry rating is "Buy" [5] Core Insights - In Q3 2025, the overall revenue growth of overseas sports footwear and apparel companies slightly declined compared to Q2 2025, with a mixed performance in gross margins and an increase in most companies' SG&A expenses [5][12] - Brands focusing on niche segments like running and outdoor activities, such as ANTA, ASICS, and Deckers Outdoor, maintained high revenue growth rates, with ANTA growing by 34.5%, ASICS by 20.4%, and Deckers by 8.3% [12][13] - Most overseas sports footwear and apparel companies continued to show positive revenue growth, with notable performances from Skechers [12] - Revenue growth rates varied by region, with North America, Europe, and Greater China showing different trends; Europe had the best performance in Q3 2025 [5][20] - The apparel category showed stronger resilience in sales compared to footwear in Q3 2025 [5][25] Summary by Sections Section 1: Revenue Growth and Margin Performance - In Q3 2025, the revenue growth of overseas sports footwear companies decreased slightly compared to Q2 2025, with most companies experiencing an increase in SG&A expenses [5][12] - The revenue growth rates for major brands in Q3 2025 included Adidas at 8%, Lululemon at 7.1%, and ASICS at 20.4% [13][18] Section 2: Inventory Levels - Most overseas sports footwear companies saw an increase in inventory turnover ratios in Q3 2025, but overall inventory levels remained manageable [5][12] Section 3: Revenue Guidance for Fiscal Year 2025 - Compared to 2024, many companies have lowered their revenue growth guidance for the current fiscal year, although brands like Adidas, ANTA, and Lululemon have raised their full-year guidance for 2025 [5][18] Section 4: Investment Recommendations - Despite the slight decline in revenue growth and rising inventory turnover ratios, the long-term outlook for the sports footwear industry remains positive, driven by upcoming major sporting events and a recovery in order placements [5][18]

Group 1: Market Overview - The S&P 500 has experienced a nearly 18% increase in 2025 and an approximately 80% rise over the past three years, highlighting the attractiveness of investing in this index [1][2] Group 2: Company Highlights - **SoFi Technologies**: A digital bank with a rapid customer acquisition rate, achieving a 38% year-over-year revenue growth in Q3 2025. The stock has risen 79% this year, indicating strong potential for future growth [4][5] - **MercadoLibre**: The leading e-commerce platform in Latin America, with a 49% year-over-year sales increase (currency neutral) in Q3. The company is diversifying its offerings with fintech services, positioning itself for significant growth [7][8] - **On Holding**: A fast-growing activewear brand that competes with major players like Nike and Lululemon. It has high gross margins and a resilient consumer base, suggesting strong expansion potential [9][10] - **Lemonade**: An innovative insurance company leveraging AI and machine learning, with a stock increase of nearly 450% over the past three years. It aims for profitability on an adjusted EBITDA basis by 2026 [13][14] - **Taiwan Semiconductor**: A key player in AI chip manufacturing, benefiting from increased demand as hyperscalers ramp up AI spending. The company is well-positioned for continued growth across various tech applications [15][16]

Core Insights - ON Holding AG (ONON) has demonstrated strong growth in the EMEA region, particularly driven by the United Kingdom and France, with net sales reaching CHF 213.3 million in Q3 2025, marking a 28.6% year-over-year increase on a reported basis and 33% on a constant-currency basis [1][7] Group 1: Market Performance - The United Kingdom has become one of ON Holding's largest markets, with significant strength in the direct-to-consumer channel contributing to EMEA's growth acceleration [2] - France, along with Germany and Italy, has shown increased brand awareness and consumer interest, aiding in capturing a larger share of the premium sportswear market [2] Group 2: Retail Strategy - The company's strategy of establishing physical brand hubs has enhanced its presence in Europe, with a new store opening in Zurich and strong performance from the Champs-Élysées location in Paris [3] Group 3: Financial Metrics - ON Holding's shares have increased by 7.7% over the past month, while the industry average rose by 8.7%, with competitors Deckers and Wolverine seeing gains of 15.8% and 8.9%, respectively [4] - The forward price-to-earnings (P/E) ratio for ON Holding is 27.22, which is higher than the industry average of 18.06, indicating a premium valuation compared to Deckers and Wolverine [5] Group 4: Sales and Earnings Estimates - The Zacks Consensus Estimate for ON Holding's current financial-year sales suggests a year-over-year growth of 41.2%, while earnings per share are expected to decline by 13.6% [8] - Current quarter sales estimates are projected at CHF 894.52 million, with a year-over-year growth estimate of 29.41% [9]

Core Viewpoint - UBS analysts express a significantly optimistic outlook for the global sports apparel sector by 2026, anticipating continued growth in market demand, particularly in key markets such as the US, China, and Europe [1][4]. Investment Strategy - The retail sector is expected to maintain a trend of differentiation, with sports apparel and functional brands benefiting from the global health consumption trend. Brands excelling in quality and functionality are favored, while investors should be cautious of macro pressures and brand execution risks [1][2]. - Specific investment opportunities within the softlines retail sector are concentrated in sports apparel and footwear, particularly for globally recognized brands with strong brand equity, innovation, and omnichannel execution capabilities, such as Nike, Under Armour, Adidas, and On Holding [2][7]. Consumer Sentiment - A UBS survey indicates a strong intent among consumers to purchase sports apparel in the next 12 months, particularly favoring high-quality products and brands with good performance, with Nike and Adidas expected to excel in these areas [1][3]. - The survey shows a 2.9% increase in softlines consumption intent compared to the previous year, with a significant acceleration of 535 basis points month-over-month. This indicates a positive shift in consumer sentiment towards softlines retail stocks [3]. Brand Recognition - Brand loyalty and recognition for sports brands are on the rise, with Nike and Adidas showing high consumer awareness globally, especially in China, where their brand recognition significantly outpaces competitors [4][5]. Key Stocks - UBS highlights specific stocks to watch, including Nike, which remains a leader in the industry with strong brand recognition and consumer loyalty. Adidas continues to perform well globally, particularly in Europe. Under Armour is viewed as a potential growth stock despite facing challenges, while Deckers Outdoor, On Holding, and Amer Sports are also noted as stocks with promising future price trends [7].

Core Insights - The Asia-Pacific (APAC) region is the primary driver for On Holding AG's global expansion, achieving a remarkable 109.2% growth in constant currency during Q3 2025, with net sales reaching CHF 144.9 million, a 94.2% year-over-year increase [1][2] Sales Performance - APAC accounted for 18.2% of total net sales in Q3 2025, up from 11.7% in the same period last year [2][7] - For the nine-month period ending September 30, 2025, APAC net sales rose to CHF 384.6 million, reflecting a 106.6% increase year-over-year [2][3] Growth Trajectory - APAC is on track to contribute 20% of total sales, driven by strong performance in China and Japan, as well as growth in South Korea and Southeast Asia [3][4] Strategic Developments - The opening of a flagship store in Tokyo's Ginza district and notable athletic achievements have enhanced brand visibility in the region, indicating that APAC is a crucial part of On's long-term strategy [4][7] Competitive Landscape - On Holding's shares have increased by 17% over the past month, compared to a 19.9% rise in the industry, while competitors Deckers and Wolverine saw increases of 23.4% and 27.7%, respectively [5] Valuation Metrics - On Holding trades at a forward price-to-earnings (P/E) ratio of 28.61, which is higher than the industry average of 18.23, indicating a premium valuation compared to Deckers and Dollar General [8] Financial Estimates - The Zacks Consensus Estimate for On Holding's current financial-year sales suggests a year-over-year growth of 41.2%, while earnings per share are expected to decline by 12.7% [9][10]

Core Insights - The global athletic footwear and apparel market is experiencing a significant shift, exemplified by the competition between NIKE Inc. and On Holding AG, with NIKE as the established leader and On Holding as a rising challenger [2][4]. NIKE's Position - NIKE maintains its status as the largest athleticwear brand, holding an estimated high-teens market share globally, supported by its extensive reach across nearly 190 countries [5][6]. - The company's first-quarter fiscal 2026 results show renewed momentum, driven by its "Win Now" strategy and a recovery in its wholesale order book, with running segment growth exceeding 20% [6][7]. - NIKE's brand positioning is premium yet inclusive, targeting various consumer demographics through strong athlete partnerships and innovative product offerings [8]. - Despite its strong fundamentals, NIKE faces gross margin pressures due to increased promotional activities, unfavorable channel mix, and rising costs, particularly in Greater China [9][10]. On Holding's Position - On Holding is characterized by rapid growth and a strong brand presence in the premium performance segment, particularly in running, despite holding only a low-single-digit market share [12][13]. - The company's footwear sales are the primary revenue driver, with apparel also contributing significantly, indicating a growing wallet share among consumers [13]. - On Holding differentiates itself through a premium-first philosophy, focusing on innovation and athlete validation to enhance brand credibility [14][15]. - The brand targets affluent, design-conscious consumers, particularly Gen Z and urban professionals, with a business model emphasizing controlled distribution and full-price selling [15][16]. Financial Performance and Valuation - The Zacks Consensus Estimate for NIKE's fiscal 2026 sales indicates a year-over-year growth of 0.9%, while EPS is expected to decline by 23.6% [18]. - In contrast, On Holding's sales are projected to grow by 41.2% year-over-year, with EPS expected to decline by 12.7% [21]. - NIKE shares have decreased by 7.1% over the past three months, while On Holding shares have increased by 7.3% [23]. - NIKE's forward P/E ratio is 31.13, above its three-year median of 28.33, while On Holding's forward P/E is 28.62, below its median of 49.63, indicating a valuation contrast [24][26]. Conclusion - On Holding is viewed as the more attractive investment opportunity due to its stronger stock momentum, compelling valuation, and potential for sustained growth [28]. - NIKE, while a formidable leader, is currently focused on stabilization and execution rather than acceleration, with its valuation reflecting recovery expectations [29][30].

Core Insights - ON Holding AG's apparel business saw a remarkable growth of 86.9% year-over-year in Q3 of fiscal 2025, reaching net sales of CHF 50.1 million, with constant currency growth at 100.2% [1][8] - The apparel segment is becoming increasingly significant, with sales penetration rising to 6.3% from 4.2% a year earlier, indicating strong global demand across various channels [2][8] Sales Performance - The growth in apparel sales was broad-based, occurring across direct-to-consumer and wholesale channels, as well as all major geographic regions [2][8] - The Performance Running and Performance Training verticals were identified as key contributors to the apparel growth, driven by increased consumer adoption and purchase frequency [3] Strategic Importance - Management views the apparel segment as a "company within the company," emphasizing its strategic relevance in attracting first-time buyers who may expand their purchases into other categories [3][4] - The brand's connection with customers is strengthening, as evidenced by selling over one million apparel items for the first time in Q3 [4] Market Position - ON Holding's shares have increased by 17.8% over the past month, slightly underperforming compared to the industry average of 19.3% [5] - The company trades at a forward price-to-earnings (P/E) ratio of 28.93, which is higher than the industry average of 18.32, indicating a premium valuation compared to competitors like Deckers and Dollar General [6] Financial Estimates - The Zacks Consensus Estimate for ON Holding's current financial-year sales suggests a year-over-year growth of 41.2%, while earnings per share are expected to decline by 12.7% [10] - Sales estimates for the current quarter (12/2025) are projected at CHF 894.52 million, with a year-over-year growth estimate of 29.41% [11]

Core Viewpoint - The article highlights five non-tech large-cap stocks that are currently trading on the dip from their 52-week highs, presenting attractive investment opportunities for 2026 [2][4]. Group 1: Market Overview - On December 11, 2025, the Dow and S&P 500 indexes advanced by 1.3% and 0.2%, respectively, reaching new all-time high closings, while the tech-heavy Nasdaq Composite fell by 0.3% [2]. - The recent Federal Reserve rate cut and high valuations in the technology sector have prompted a shift in market focus towards rate-sensitive cyclical sectors such as utilities, industrials, financials, energy, materials, and healthcare [3]. Group 2: Featured Stocks On Holding AG (ONON) - On Holding specializes in footwear and sports apparel, with an expected revenue growth rate of 20.6% and earnings growth rate of 79.3% for the next year [5]. - The Zacks Consensus Estimate for next year's earnings has improved by 22% over the last 30 days, and ONON is currently trading at a 22.7% discount from its 52-week high [5]. Lennar Corp. (LEN) - Lennar is involved in homebuilding and financial services, benefiting from a tech-enabled manufacturing platform aimed at improving efficiencies and reducing costs [6]. - The company has an expected revenue growth rate of 1.9% and earnings growth rate of 11.1% for the next year, with a 21.2% discount from its 52-week high [8]. Jefferies Financial Group Inc. (JEF) - Jefferies has gained market share in investment banking without significantly expanding its balance sheet, which is expected to drive top-line growth [9]. - The expected revenue growth rate is 16.5% and earnings growth rate is 59.5% for the next year, with a 23.7% discount from its 52-week high [11]. Omnicom Group Inc. (OMC) - Omnicom's diverse portfolio across traditional and digital marketing segments enhances revenue stability [12]. - The expected revenue growth rate is 3.1% and earnings growth rate is 8.8% for the next year, currently trading at a 13.2% discount from its 52-week high [14]. Thomson Reuters Corp. (TRI) - Thomson Reuters provides value-added information and technology across various sectors, including law, tax, and financial services [15]. - The expected revenue growth rate is 7.6% and earnings growth rate is 12.4% for the next year, with a significant 39.6% discount from its 52-week high [16].

Core Insights - Victoria's Secret (VSCO) and On Holding (ONON) are both attractive stocks for value investors, but a deeper analysis is required to determine which is more appealing [1][3]. Valuation Metrics - Both VSCO and ONON currently hold a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions and an improving earnings outlook [3]. - VSCO has a forward P/E ratio of 20.09, while ONON has a significantly higher forward P/E of 51.72 [5]. - The PEG ratio for VSCO is 2.18, which is comparable to ONON's PEG ratio of 2.20, indicating similar expected earnings growth rates [5]. - VSCO's P/B ratio stands at 6.15, contrasting with ONON's P/B ratio of 16.14, suggesting that VSCO is more favorably valued in terms of market value versus book value [6]. - Based on these valuation metrics, VSCO receives a Value grade of A, while ONON is rated F, highlighting VSCO as the superior value option [6][7].

Market Overview - The Dow and S&P 500 indexes advanced 1.3% and 0.2%, respectively, reaching all-time high closings, while the Nasdaq Composite fell 0.3% [1] - Market participants are shifting from technology to rate-sensitive cyclical sectors such as utilities, industrials, financials, energy, materials, and health care due to the recent Fed rate cut and high valuations in the tech sector [2] Recommended Stocks - Five non-tech large-cap stocks are recommended, currently trading below their 52-week highs and at attractive valuations: On Holding AG (ONON), Lennar Corp. (LEN), Jefferies Financial Group Inc. (JEF), Omnicom Group Inc. (OMC), and Thomson Reuters Corp. (TRI) [3][9] On Holding AG (ONON) - On Holding specializes in footwear and sports apparel, offering products through various channels [6] - Expected revenue and earnings growth rates for next year are 20.6% and 79.3%, respectively, with a 22% improvement in earnings estimates over the last 30 days [7] Lennar Corp. (LEN) - Engaged in homebuilding and financial services, focusing on tech-enabled manufacturing to enhance efficiency and reduce costs [8] - Expected revenue and earnings growth rates for next year are 1.9% and 11.1%, respectively, with a 0.2% improvement in earnings estimates over the last week [10] Jefferies Financial Group Inc. (JEF) - Gained market share in investment banking without significantly expanding its balance sheet, which is expected to drive top-line growth [11] - Expected revenue and earnings growth rates for next year are 16.5% and 59.5%, respectively, with a 0.8% improvement in earnings estimates over the last week [13] Omnicom Group Inc. (OMC) - Operates a diverse portfolio in traditional and digital marketing, enhancing revenue stability [14] - Expected revenue and earnings growth rates for next year are 3.1% and 8.8%, respectively, with a 2.4% improvement in earnings estimates over the last 30 days [16] Thomson Reuters Corp. (TRI) - A leading provider of information and technology across various sectors, including law, tax, and financial services [17] - Expected revenue and earnings growth rates for next year are 7.6% and 12.4%, respectively, with a 2.1% improvement in earnings estimates over the last 60 days [18]