High inflation is threatening to hurt the U.S. economy, but not every hot consumer company is going to be be hurt, according to investment firm Berenberg. Analyst Rudy Yang upgraded Yeti to buy from hold, saying that shares of the cooler and apparel company have fallen too far in recent months. "Since hitting its 52-week high on November 5, Yeti has underperformed the market (down ~49% vs. Russell 2000 down ~17%), despite delivering continued growth on its top and bottom lines," Yang wrote. "While we previously saw limited valuation upside, we find the company's recent de-rating to be unwarranted, as fears over mean reversion and temporary margin headwinds have overshadowed Yeti's solid fundamentals and robust growth trajectory." In fact, Yeti's demand, as measured by web traffic to the company's website, appears to be showing strong growth, Berenberg said. "We found Yeti's web traffic to be up > 17% compared to levels from March 2021, indicating continued demand strength in the company's DTC channel, which makes up over half of its sales. In addition, we found Yeti's online traffic share to be substantially ahead of that of its peers, highlighting the company's brand strength and customer retention ability," Yang wrote. Shares of the consumer products company are down more than 33% year to date, and they also lost ground in March, when broader markets enjoyed a rebound. Berenberg did cut its price target on the Yeti to $92 per share from $103. Still, that new target is more than 67% above where the stock closed on Wednesday. —CNBC's Michael Bloom contributed to this report.
The Yeti logo is seen on a cooler for sale at the company's flagship store in Austin, Texas.
Sergio Flores | Bloomberg | Getty Images
High inflation is threatening to hurt the U.S. economy, but not every hot consumer company is going to be be hurt, according to investment firm Berenberg.