Shares of outdoor lifestyle brand Yeti (YETI 1.02%) rose 7% this week as of 1 p.m. E.T. Thursday, according to data provided by S&P Global Market Intelligence.
The main impetus for this increase stems from a Citigroup analyst raising their price target on the company from $36 to $44, implying roughly 16% upside.
However, the company's share price also appears to be rising due to an unexpected use case for one of Yeti's products.
NYSE: YETI
Key Data Points
Yeti: One red flag and three green flags
First, the bad news. The Citi analyst believes Yeti's web traffic dipped in the second quarter compared to its drinkware peers.
However, Citi's analysis shows that overall web traffic to Yeti's site continues to grow. As the company looks to expand beyond drinkware, which currently accounts for 59% of sales, this rising traffic to Yeti's new product categories appears promising.
Image source: Getty Images.
One product contributing to this outsize web traffic for Yeti is its Camino 35 Carryall Tote. Typically used for hiking, fishing, camping, or beach-going activities, the tote went viral on TikTok after being repurposed as the "ultimate mom bag."
A Jefferies analyst noted that online searches for the tote increased 12-fold over the last month. When I wrote about Yeti back in April, I said that growing new product categories would be essential for the company -- and this recent development could be a great start in doing so.
In addition to these promising news items, both analysts believe there could be upside in Yeti's upcoming earnings report, thanks to a slightly less chaotic tariff situation now. Initially, Yeti believed its cost of goods may rise by $100 million due to new tariffs, but a deal between the U.S. and China could reduce this figure.
