In a research report released today, Cantor analyst Laura Champine downgraded shares of Lumber Liquidators Holdings Inc (NYSE:LL) to Hold rating and slashed the price target to $26 (from $42), as she believes that there are too many regulatory and legal risks at this juncture to justify a Buy rating on the stock.
Champine wrote, “Our price target is based on a 2016 P/E multiple of 15x, which we view as a fair valuation given the current risk/reward scenario. We don’t think LL’s business model is broken, and we continue to believe its value proposition and broad assortment will drive a sales recovery and market share gains over the long term. Our near-term view has become much cloudier though, as LL faces uncertain outcomes from multiple regulatory and legal issues. We think the overall negative PR continues to gain momentum, making it extremely difficult for us to gauge customers’ willingness to shift into other product categories now that the company has discontinued the sale of Chinese laminates.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Laura Champine has a total average return of 3.2% and a 52.8% success rate. Champine has a 19.3% average return when recommending LL, and is ranked #1353 out of 3606 analysts.