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Investors should utilize the sharp pullback in Yeti ‘s stock to buy into a company with “solid fundamentals” at a steep discount, according to Canaccord Genuity. Analyst Brian McNamara initiated coverage of the cooler and drinkware maker with a buy rating in a note to clients Wednesday, saying the stock is as “bear-proof as its coolers” and calling the company an “iconic global lifestyle brand with staying power.” “We believe this is a long-term growth story of a brand that is still underpenetrated in many parts of the U.S., while a nascent international business should be a disproportionate contributor of growth moving forward,” he wrote, adding that near-term margin issues have masked the company’s potential. Shares of Yeti have underperformed since the start of the year, falling 48% compared with a roughly 18% drawback in the S & P 500 . The firm’s $58 price target suggests shares could rebound about 35% from Wednesday’s close. “Despite its first ‘miss & cut’ as a public company with Q2 results and a potential risk that an incoming CFO could lower the bar, we believe market expectations are overly conservative,” McNamara wrote. “Trading under 16x 2023E consensus EPS, a 9% discount to the S & P500 (compared to an average pre-pandemic premium of 34%), we find the de-rating over the last year overdone and would encourage investors to use the underperformance as an opportunity to purchase this iconic global lifestyle brand at a discount,” he added. Shares traded flat Thursday. — CNBC’s Michael Bloom contributed reporting
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