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On Friday, Stifel analysts adjusted their position on Yeti Holdings Inc. (NYSE: NYSE:YETI), reducing the price target from $34.00 to $31.00, while reaffirming a Hold rating on the stock. Currently trading at $29.61 with a market cap of $2.45 billion, Yeti maintains a "GOOD" overall financial health score according to InvestingPro analysis. The revision follows Yeti’s solid performance in the first quarter of 2025, which exceeded expectations. Despite the positive outcome, Yeti anticipates a challenging fiscal year ahead, with the company adjusting its full-year 2025 guidance to account for significant tariff impacts.
The increased cost of goods sold (COGS) by approximately $100 million for the fiscal year 2025 is largely attributed to a 145% tariff rate on goods imported from China, which is expected to affect around 90% of Yeti’s China-related costs before any mitigation efforts. Despite these challenges, Yeti maintains strong fundamentals with a healthy current ratio of 2.58 and more cash than debt on its balance sheet. Additionally, Yeti foresees a negative impact on revenue growth due to inventory supply disruptions, estimated at a 300 basis point reduction. For deeper insights into Yeti’s financial health and future prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips.
Yeti is actively working on sourcing diversification to mitigate these challenges, aiming to reduce its China-to-U.S. exposure to just 5% of total COGS by the end of fiscal year 2025. The company is known for its operational discipline, which Stifel believes will aid in successfully navigating the tariff landscape over time. However, this may come at the cost of near-term profitable growth visibility.
Stifel’s analysts express caution due to negative trends in the U.S. market as the country approaches what could be a demand-challenged environment in the second half of 2025. The company maintains strong profitability with a gross margin of 58.2% and return on equity of 25%. Despite the intriguing valuation of Yeti’s stock, Stifel’s stance remains conservative. The $31 target price is based on a 7.0x calendar year 2026 estimated enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts’ targets ranging from $29 to $53 per share.
In other recent news, YETI Holdings Inc. reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.31, surpassing the forecast of $0.27. Revenue also outperformed projections, reaching $351.1 million against the anticipated $347.5 million. Despite these positive results, YETI revised its full-year EPS guidance downward due to a projected $100 million tariff impact. The company expects sales growth of 1-4% for the year, with international business projected to grow by 15-20%. Notably, YETI is undergoing a significant supply chain transformation to reduce reliance on China, aiming for 90% of U.S. Drinkware production to be ex-China by year-end. Analysts from firms like Jefferies and Goldman Sachs have expressed interest in YETI’s supply chain strategy and product innovation pipeline. The company plans to introduce over 30 new products in 2025, emphasizing its commitment to innovation despite ongoing challenges.
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