Skip to main content

Market Overview

Morgan Stanley Says 'Heightened Uncertainty' A Key Theme In Slashing Lumber Liquidators

Share:

In a report published Monday, Morgan Stanley analyst Simeon Gutman downgraded shares of Lumber Liquidators Holdings Inc (NYSE: LL) to Equal-weight from Overweight while removing an $85 price target due to "heightened uncertainty."

See Also: Morgan Stanley: '60 Minutes' Lumber Liquidators Story Suggested 'Short Sellers Have A Stake'

Gutman noted that if there were any prevailing quality issues in the company's supply chain (as suggested by Sunday's "60 Minutes" report), it is assumed they were largely behind the company. The analyst added that the allegations are two to three years old and "much of what we heard last night was not new."

In fact, Gutman argued in a note on November 4 that if Lumber Liquidators products were not in compliance with California regulations, the financial repercussions "seem manageable." The analyst also stated that the company "has significantly beefed up" its compliance knowing that its reputation has been on the line for some time.

"After watching the 60 Minutes episode, we are concerned that quality issues may still exist," Gutman wrote. "We recognize we are reacting to one interpretation of the situation, one that is clearly being influenced by investors who have a stake in the outcome."

Bottom line, Gutman wrote that "something would really have to be awry if there were still product quality issues, in our view." On the other hand, the analyst also wrote that the 60 Minutes piece may have suggested that certain legacy issues "may not have been fully resolved."

Latest Ratings for LL

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

View More Analyst Ratings for LL
View the Latest Analyst Ratings

 

Related Articles (LL)

View Comments and Join the Discussion!

Posted-In: 60 minutes Morgan Stanley Simeon GutmanAnalyst Color Analyst Ratings

Latest Ratings

StockFirmActionPT
ETCredit SuisseMaintains13.0
IFRXCredit SuisseMaintains2.8
METCredit SuisseMaintains68.0
FLXNCredit SuisseMaintains14.0
ENPHCapital OneInitiates Coverage On175.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com