Lumber Liquidator's (LL) stock price is on a downward trajectory ever since Whitney Tilson (Trades, Portfolio) gave his bearish presentation on the company. His main concerns were the company's product quality and sourcing of illegal wood. Until recently, most of the sell-side analysts didn't agreed with his opinion. Out of 16 analyst covering the company, eight were bullish and had buy ratings, while the other eight had hold recommendations. None of the analyst had a sell or underperform rating on the stock. However, post CBS's "60 Minutes" expose it seems like sell-side is realizing the problem with levels of formaldehyde (a cancer-causing chemical) in Lumber Liquidators' Chinese-made laminate flooring.
A Morgan Stanley analyst has recently threw in the towel and removed his price target on the company. His earlier price target was $85 for the company's stock. In his latest report he mentioned, "something would really have to be awry if there were still product quality issues, in our view." The following is excerpt from Morgan Stanley's recent note to clients: Continue Reading »