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These 3 Analysts Agree: Yeti Is a Buy

By Rich Duprey - Feb 12, 2021 at 1:45PM

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The cooler maker still has plenty of room to expand, particularly as it enters new markets.

Yeti (YETI 8.84%) beat Wall Street sales and earnings expectations yesterday, and today a trio of analysts agreed that the stock of the high-end cooler and outdoor lifestyle company is a buy. They also see shares jumping, with as much as 30% upside.

Yeti also made the short list of best stock ideas from one of Hedgeye Risk Management's analysts, but another Hedgeye analyst cautions that the cooler maker's growth is due to slow in the coming months, though she maintains it's going to be better than what she originally thought.

Man pulling a Yeti cooler onto the beach

Image source: Yeti.

The pandemic sent consumers out into the wilderness in droves, and apparently they were all dragging Yeti coolers behind them while drinking from Yeti tumblers.

Fiscal fourth-quarter sales jumped 26% to almost $376 million, well ahead of the consensus estimates of $358 million, as cooler sales jumped 31% to $134 million, and drinkware sales were up 23% to $236 million. Margins expanded to 59.8% from 54.5% in the process.

Citi analyst Wendy Nicholson upgraded Yeti's stock to buy from hold, and set a $91 price target. That's up 7% from her previous $85 target, and 27% higher from where Yeti shares closed yesterday.

She also expects Yeti's "COVID-fueled" sales to slow from current levels, and management's forecast of 15% to 17% growth this year is more than she was modeling. And because Yeti plans to enter the luggage market, the upside could last longer than Nicholson forecast.

Piper Sandler analyst Peter Keith  boosted his price target to $95 based on yesterday's earnings while maintaining his overweight recommendation. He would also be a buyer after Yeti's stock fell following the earnings release.

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