For years, the debate around YETI Holdings, Inc. (NYSE:YETI) has centered on whether the premium outdoor brand could improve growth in its mature US drinkware segment. However, recently, Stifel upgraded the stock to Buy from Hold and raised the firm’s price target to $50 from $45. The firm believes that the company’s future growth is increasingly tied to international expansion and newer categories such as bags and soft coolers rather than a major rebound in drinkware sales.
The upgrade shifts the focus from YETI’s legacy business to its newer growth engines. However, YETI’s improving brand momentum comes with a financial warning investors shouldn’t ignore.
A Broader Growth Strategy Could Unlock New Opportunities
YETI delivered the kind of result in August that investors typically reward. The company reported strong results. Revenue rose 9%, adjusted EPS beat Wall Street consensus, and it raised its full-year adjusted EPS and operating margin guidance. Stifel’s upgrade also reflects its more constructive view of YETI’s longer-term growth opportunities. Moreover, the company’s expansion plan into larger addressable markets beyond coolers and drinkware reflects the firm’s optimism. At the same time, its Project Upcycle productivity initiative could provide another boost to profitability. YETI has identified approximately $100 million of productivity opportunities across cost of goods sold and operating expenses. The company plans to reinvest some of these savings into international expansion, innovation, and brand building. This could become particularly important if revenue growth settles with YETI’s mid-to-high single-digit long-term framework.
On the valuation front, the stock is currently trading at a forward P/E of 14x, broadly in line with the sector median. However, it is trading at around a 22% discount to its 5-year average of 18x. I won’t say the stock is currently undervalued; it’s rather fairly valued. Although investors are currently worried about the company’s drinkware business, its expansion plans, if executed well, could offer significant upside potential. Having said that, there are other stocks in industries that are growing much faster, and we cover them in our premium monthly newsletter.
In our previous coverage, we discussed YETI’s (YETI) Brand Machine Keeps Growing, But Cash Is Draining Fast
Hedge fund ownership of Yeti Holdings Inc. gained modestly, with the number of hedge funds holding the stock increasing from 35 at the end of Q1 2026 to 36 at the end of Q2 2026. As of August 31, 2026, short interest reached 14.10% of the float. Together, these signals reflect mixed investor sentiment around the stock.
The New Growth Strategy Still Has To Prove It Can Scale
On September 17, at Investor Day, the company introduced a mid-to-high single-digit revenue growth framework. This is below the high-single-digit to low-double-digit long-term growth range that management had previously said it saw a clear path toward. Investors may argue that the company is effectively resetting expectations rather than accelerating growth. This shows YETI is now relying more heavily on international markets and newer categories such as bags and soft coolers to diversify its growth beyond drinkware.
Moreover, the low end of the new framework assumes flat US drinkware sales, highlighting the challenge facing its largest category. While Stifel mentioned that the company’s international expansion and newer categories are increasingly important growth drivers, international sales still represented a relatively small portion of the business. Investors must therefore determine whether strong growth rates can continue as YETI expands into Europe and Asia. For now, YETI’s move beyond drinkware looks promising, but whether it pays off will depend on how effectively international growth and newer categories can offset weakness in its mature U.S. drinkware business.
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