Is On Holding (ONON) a Buy as Wall Street Analysts Look Optimistic?

Group 1 - On Holding (ONON) has an average brokerage recommendation (ABR) of 1.37, indicating a consensus between Strong Buy and Buy, with 79% of recommendations being Strong Buy and 5.3% being Buy [1] - Despite the positive ABR, there is skepticism regarding the reliability of brokerage recommendations, as studies show limited success in guiding investors towards stocks with the best price increase potential [2] - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, often resulting in a higher number of Strong Buy recommendations compared to Strong Sell [2][5] Group 2 - The Zacks Rank, a proprietary stock rating tool, is considered a more reliable indicator of a stock's near-term price performance, with a strong correlation between earnings estimate revisions and stock price movements [3][5] - The Zacks Rank is distinct from the ABR, as it is based on earnings estimate revisions and is displayed in whole numbers, while the ABR is based solely on broker recommendations and is typically shown in decimals [4] - Recent earnings estimate revisions for On Holding indicate a decline of 7.5% in the Zacks Consensus Estimate for the current year, leading to a Zacks Rank of 5 (Strong Sell), suggesting caution despite the favorable ABR [7]