Goldman On Lumber Liquidators: 'Sentiment Is Highly Skeptical'

Goldman Sachs cut its price target on Lumber Liquidators Holdings Inc LL Thursday from $60 to $40 and maintained a Buy rating.

Analysts, led by Matthew J. Fassler, explained that the estimates and price target were cut to reflect the "poor publicity on LL's business."

Despite the headlines and recent 60 Minutes episode, Fassler maintained a Buy rating because the stock "corrected dramatically" and was down nearly 50 percent from its earnings announcement on February 25.

According to the analyst, the "risk/reward looks favorable, despite our assumption of some business disruption, given the color the company put out in its 8-K" following the 60 Minutes exposé.

Related Link: 8 Damning Quotes From The 60 Minutes Exposé On Lumber Liquidators

On March 12, LL's management will speak to the Street on a conference call and will "have an opportunity to answer its critics with ample preparation," Fassler noted.

"We have no reason not to believe the company's recent assertions in the face of poor headlines, and have not seen proof of danger to consumers. We believe sentiment is currently highly skeptical," the analyst stated.

While the analysts saw a "significant marketing risk" for the company, it was felt that the product safety claims involved "only a small portion of its mix."

Lumber Liquidators Holdings Inc recently traded at $36.19, up 1.54 percent.