Market Overview

What Morgan Stanley Said About Lumber Liquidators This Morning


Lumber Liquidators Holdings Inc (NYSE: LL) shares are down significantly on Wednesday. In less than 20 minutes, the company warned of both (a) an upcoming negative 60 Minutes interview and (b) a potential DOJ probe on its earnings call.

Worth noting, Morgan Stanley commented on the stock before the stock move this morning. Analysts mostly discussed the company's financials and store checks.

Here are highlights from the note:

  • The fourth results and guidance “were noisy, with elements for the bulls to get excited about and elements for the bears to knock," they wrote.
  • On the bright side, “full year 2015 comp guidance is positive single digits (which could mean a lot of things) while Q1 comps to date are +12%.”
  • “Given the stock’s recent strength...on the back of positive flooring/housing commentary, a modest pullback would not be surprising," they warned.

Related Link: What Are Lumber Liquidators Investors Afraid Of?

  • Based on store visits, Morgan Stanley also noted Lumber Liquidators is “lowering shelf prices on a lot of its products in an effort to preemptively reduce markdowns and discounting that had been common in the business."
  • “In theory," they concluded, "these investments should provide a margin floor (no pun intended) from which LL’s product margins may re-expand as discounting and promotions are reduced.”

Latest Ratings for LL

Jan 2021Morgan StanleyMaintainsUnderweight
Jan 2021Loop CapitalDowngradesBuyHold
Aug 2020Morgan StanleyMaintainsUnderweight

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