Jefferies: Lumber Liquidators Not 'Out of the Woods'

Lumber Liquidators Holdings Inc LL is experiencing a bad two-day stretch, falling from a close above $68.50 on Tuesday to below $50. News that the company would be featured negatively on "60 Minutes" as well as the fact that the company is being investigated by the Justice Department for violations in the Lacey Act compounded bad earnings to send the stock lower.

See Also: What Are Lumber Liquidators Investors Afraid Of?

With this as an overhang, analysts at Jefferies noted that the company is not “out of the woods just yet.” The DOJ investigation is an overhang that will ultimately cause the company to cut margins in order to boost sales. The analysts said that risks to the stock include a continuation of weak traffic trends, competitive pressures, rising interest rates and the potential negative impact on housing.

As a result of Wednesday's developments, the analysts reduced their price target on Lumber Liquidators to $52 from $59 prior and reiterated a Hold rating on the stock.

Shares traded recently at $49.31, down 2.6 percent.