The pandemic's end may not stop the great outdoors megatrend — how to play it

Published Sun, Apr 11 20219:00 AM EDT

The Covid-19 pandemic and the social-distancing restrictions triggered a boom in outdoor activities like fishing and camping, and the rise isn't showing signs of slowing with the vaccine rollout. Here is how to play this megatrend and the stocks that will benefit the most, according to Cowen. "Our checks, industry data and recent management commentary during conference calls suggest trends in outdoor related activities such as fishing, hunting, camping, firearms and other outdoor activities have not slowed into Spring 2021 following a robust 2020," Cowen analyst John Kernan said in a note. Total outdoor participation among Americans grew to 52.9% in 2020 from 50.7% in 2019, according to data from Outdoor Industry Association. The growth marks the biggest annual increase since the organization started tracking the data. Eight million more Americans participated in camping in 2020, a 28% year-over-year increase, according to a recent report from Kampgrounds of America cited by Cowen. Moreover, nearly half of all campers last year were either first-time campers or recently returning to the activity after many years away, the report said. A record number of people also found their new hobbies in hunting and fishing. Outstanding hunting licenses grew 8% in 2020 to 38.9 million, the highest level on record going back to 1958, according to the U.S. Fish & Wildlife Service. Fishing licenses also saw a double-digit increase, Cowen said. Cowen said these long-term growth trends will benefit four companies in particular — Yeti Holdings, American Outdoor Brands , Columbia Sportswear Company and Dicks Sporting Goods . The Wall Street firm reiterated its outperform rating on Yeti this week, saying its the company has a long road of future growth with further global expansion. "YETI's authentic and premium positioning sets it up well to take advantage of current trends among consumers that favor outdoor activities and health & wellness," Cowen's strategist said in a note. Cowen has an $81 price target on Yeti, which would represent a 4% gain from here. The firm also recently hiked it earnings outlook on American Outdoor Brands as its product pipeline remained robust with more than 300 new launches ahead. "Brand development is catching interest from potential new channel partners," Cowen said. "We are encouraged by AOUT's growth and look forward to management's capital allocation plans as it pursues both organic growth and opportunistic M & A." Cowen expects the stock to climb more than 50% to $41 in the next 12 months.

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