UPDATE: Wedbush Downgrades Lumber Liquidators; Reduces Price Target
In a research note released Thursday, Wedbush downgraded Lumber Liquidators (NYSE: LL) to Neutral from Outperform and reduced the price target from $125 to $105. The firm has also lowered its estimate for 2014 EPS to $3.46 from $3.63.
Wedbush analyst Seth Bashman highlights Lumber Liquidators susceptibility to the slowing trend in the housing industry as the main reason for the downgrade. In fact, Basham notes, "Selling a high-ticket discretionary housing item—hard surface flooring—exposes LL to shifting tides in housing markets more so than home improvement retailers selling a broader array of merchandise."
In forecasting Lumber Liquidator's 2014 performance Basham stated, "We believe LL faces a tall task this month to hit the midpoint of its 1Q14 comp guidance of 3- percent due to continued unfavorable weather. Given the long sales cycle, it will not be until sometime in 2Q that demand trends will become clearer." Basham concluded, "We believe 2Q will be the best comp quarter of the year."
At last check, Lumber Liquidators was trading down about 2.5 percent at $106.18.
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