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Top-Line Data Is Critical For Lumber Liquidators, Says Morgan Stanley

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Morgan Stanley issued a company update on Lumber Liquidators Holdings Inc (NYSE: LL) after the company reported first quarter sales that were "better than feared." Morgan Stanley rates Lumber Liquidators as Equal-Weight while a price target was unavailable.

Analysts Simeon Gutman and Joshua Siber wrote, "While near term (Q1 & Q2) earnings will be weaker than expected, that the top-line trajectory of the business seems to be holding together in the face of significant product quality allegations is the more important story line."

Total laminate sales were the hardest hit product segment, declining 19 percent, as they are the focal point of product quality scrutiny. Because the second quarter is seasonally a busier time for flooring and open orders totaled $46.4 million at the end of March, analysts believe that second quarter sales could be stronger than current estimates. However, because the lumber company is running extensive promotions, gross margins and earnings will be hurt in the near term.

Shares of Lumber Liquidators closed Thursday at $33.20.

Latest Ratings for LL

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

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