KeyBanc raises Yeti stock rating on valuation grounds

On Thursday, Yeti Holdings Inc. (NYSE:YETI) received an updated stock rating from KeyBanc, which moved the company from Underweight to Sector Weight. The adjustment comes despite a reduction in earnings estimates for the coming years. KeyBanc analyst Noah Zatzkin revised the fiscal year 2025 earnings per share (EPS) estimate to $2.35, down from the previous $2.86, and the fiscal year 2026 EPS forecast to $2.50, decreased from $2.98. According to InvestingPro data, 13 analysts have recently revised their earnings estimates downward for the upcoming period, reflecting broader market concerns.

The rationale behind the upgrade is tied to Yeti’s current valuation metrics. Zatzkin pointed out that Yeti is trading at 10.8 times the firm’s estimated earnings for fiscal year 2026, which is below its historical range of approximately 11 to 30 times, and under the blended average of 12.4 times for its peers. Currently trading at a P/E ratio of 12.91, InvestingPro’s Fair Value analysis suggests the stock is undervalued, with strong financial health indicators and management actively buying back shares. This valuation assessment suggests that Yeti’s stock price is now considered fair when compared to its historical performance and market peers.

Yeti’s shares have seen a significant decline, dropping 37% since KeyBanc’s downgrade on July 16, 2023, in contrast to the S&P 500’s increase of 17% over the same period. The analyst’s commentary reflects a recognition of the risks to earnings per share that could arise from tariffs, which have been factored into the new rating.

The upgrade to Sector Weight indicates that KeyBanc now views Yeti’s stock as appropriately valued within its industry sector, aligning with the average market performance of its peers. This change in rating suggests a neutral outlook on the company’s stock, with no specific recommendation to either buy or sell.

Investors may find the updated estimates and rating change to be of interest as they assess Yeti’s performance and consider its position within the broader market. The company’s stock will continue to be monitored for its ability to navigate the potential headwinds and capitalize on its market valuation.

In other recent news, Yeti Holdings Inc. has been the focus of several analyst evaluations and strategic developments. Jefferies reiterated a Buy rating with a $55 price target, highlighting Yeti’s appointment of two new board members as a move to enhance innovation and global expansion. Similarly, Citi analysts maintained their Buy rating and $47 price target, despite noting a downturn in global web traffic for hydration brands, including Yeti, in early 2025. Canaccord Genuity maintained a Hold rating with a $42 price target, acknowledging the positive market response to Yeti’s cooperation agreement with Engaged Capital and the board refreshment initiative.

The appointment of J. Magnus Welander and Arne Arens to Yeti’s board, effective March 24, 2025, was part of a cooperation agreement with Engaged Capital and was positively received by the market. This strategic move is seen as aligning with Yeti’s growth and value objectives, with Engaged Capital playing a significant role in identifying Arens as a prospective board member. Canaccord Genuity also maintained a Hold rating with a $35 target, expressing caution due to uncertainties like tariffs and competitive intensity.

Despite these challenges, analysts like Jefferies express confidence in Yeti’s brand strength and potential for high margins. The company’s strategic board appointments and cooperation with Engaged Capital are viewed as steps toward enhancing its leadership and expanding its market presence. Investors have reacted favorably to these developments, reflecting optimism about Yeti’s future prospects.

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