UPDATE: Stifel Downgrades Furniture Brands International to Sell on Expected Liquidation

In a report published Wednesday, Stifel analyst John Baugh downgraded the rating on Furniture Brands International FBN from Hold to Sell. In the report, Stifel noted, “We are downgrading Furniture Brands from Hold to Sell as we believe some form of liquidation of the company or bankruptcy filing is imminent and we believe fair value on the equity is $0. On an annual basis, the company has seen 8 years of revenue declines and we believe 2013 will be another down year. In the most recent quarter, the company has announced that it will attempt to renegotiate its credit facilities, sell off assets, and look into further cost reductions to address the liquidity concerns. We believe it is more likely that they are talking to workout investment bankers or bankruptcy attorneys about their options. We have heard from various sources that the company has been unable to pay vendors in a timely manner in the past week and there is risk that they will have issues buying raw materials necessary to make product going forward. Clearly the Street has similar feelings as we do as the company was forced into a reverse 1:7 stock split in order to keep from being de-listed by the exchange in May and the stock is now back under $2 today. The equity is worth nothing in our opinion.” Furniture Brands International closed on Tuesday at $1.37.