In a report released today, John Kernan from TD Cowen maintained a Hold rating on Yeti Holdings (YETI – Research Report), with a price target of $38.00.
John Kernan has given his Hold rating due to a combination of factors impacting Yeti Holdings. The company’s growth in the U.S. market is slowing, although there is potential for reacceleration in the second half of 2025. International markets, such as Canada, Australia, the UK, and Germany, remain strong, which is a positive aspect for the company. However, domestic competition in the drinkware segment poses a challenge, and the company’s valuation is currently in a range that lacks clear catalysts for change.
Despite a near peak in gross margins and efforts to diversify sourcing away from China, Yeti’s valuation is below its historical average, and its operating margins have contracted from their peak levels. The company’s working capital efficiency could improve, as inventory turnover is low, potentially unlocking more consistent free cash flow. While management plans to outline strategic priorities for long-term growth at an upcoming Investor Day, current guidance suggests a weaker backdrop for early 2025, with foreign exchange impacts and modest sales growth expectations. These factors contribute to the Hold rating, as the company navigates both opportunities and challenges.
In another report released on February 14, Roth MKM also maintained a Hold rating on the stock with a $41.00 price target.