Citi maintains Buy rating and $47 target on Yeti shares

On Monday, Citi reiterated its Buy rating and $47.00 price target for Yeti Holdings Inc. (NYSE: NYSE:YETI), following the company’s announcement of a new cooperation agreement and board appointments. According to InvestingPro data, the company has been profitable over the last twelve months, though its stock has experienced significant volatility recently, trading near its 52-week low. Yeti Holdings disclosed that it has entered into a cooperation agreement with Engaged Capital and will be adding two new members to its Board of Directors (BoD) on March 24, 2025. The new appointees are J. Magnus Welander, the former CEO of Thule Group AB, and Arne Arens, the former CEO of Boardriders and prior Global Brand President/CEO for The North Face.

The expansion of Yeti’s board will increase the total number of directors to ten, with nine of them being independent. The company has engaged in extensive discussions with Engaged Capital, a significant shareholder, to align on objectives aimed at accelerating growth and enhancing stockholder value. InvestingPro analysis reveals that Yeti maintains a strong financial position, holding more cash than debt on its balance sheet, with liquid assets exceeding short-term obligations. The appointments are part of Yeti’s ongoing board refreshment initiative, which seeks to match director experience and skills with the company’s strategic plans and future growth opportunities.

Citi’s analyst highlighted the importance of these board changes, noting that they are in line with Yeti’s efforts to strengthen its governance and strategic oversight. The addition of Welander and Arens brings a wealth of experience in brand leadership and outdoor products, sectors that are closely related to Yeti’s business.

Yeti Holdings, known for its outdoor and recreational products, has been focusing on expanding its market presence and product offerings. The company’s strategy involves leveraging its brand strength to enter new markets and create innovative products that resonate with its customer base.

The market will be watching closely to see how these new board members contribute to Yeti’s strategy and whether their expertise will translate into tangible growth and enhanced value for shareholders. As of now, Citi’s reaffirmed Buy rating and price target suggest confidence in Yeti’s direction and the potential impact of the newly appointed board members. However, InvestingPro data shows that 13 analysts have recently revised their earnings expectations downward, and the stock is currently trading at a high P/E ratio relative to near-term earnings growth. For deeper insights into Yeti’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, YETI Holdings Inc. reported its fourth-quarter 2024 earnings, with earnings per share (EPS) surpassing expectations at $1.00, compared to the forecast of $0.93. Despite a slight revenue shortfall, with $546.5 million against an anticipated $552.31 million, the company’s full-year sales rose by 9% to $1.84 billion. Operating income also saw an increase of 18% to $389 million, and the company generated $220 million in free cash flow for the year. In a strategic move, YETI expanded its Board of Directors by appointing J. Magnus Welander and Arne Arens, aiming to leverage their expertise for future growth.

Analyst firms have had mixed reactions to YETI’s recent performance. TD Cowen maintained a Hold rating on YETI but reduced the price target from $44 to $38, citing concerns about U.S. market competition and a slowdown in domestic growth. Meanwhile, Piper Sandler expressed confidence by maintaining an Overweight rating and a $52 price target, highlighting YETI’s growth potential and strong international market performance. Stifel also maintained a Hold rating while lowering the price target to $40, acknowledging YETI’s optimistic forward guidance but noting uncertainties in international sales and market saturation risks.

YETI’s strategic initiatives include diversifying its supply chain away from China and focusing on international expansion, particularly in markets like Japan, to drive future growth. The company is also exploring new product innovations, such as a powered cooler system, to enhance its product lineup. These developments reflect YETI’s ongoing efforts to strengthen its market position and drive long-term shareholder value.

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