NEW YORK – A Wall Street analyst says it's time to buy stock of troubled flooring retailer Lumber Liquidators, citing the company's recent hiring of an executive to manage its legal problems.
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Shares of Lumber Liquidators soared more than 13 percent Thursday.
The company's stock has been falling since March when the CBS news program "60 Minutes" reported that Lumber Liquidators' laminate flooring made in China contained high levels of the carcinogen formaldehyde. The company denied the allegation and later removed Chinese flooring from its stores. In May, it said the U.S. Justice Department was seeking criminal charges related to the sourcing of its wood.
Lumber Liquidators said Tuesday that it hired Jill Witter as chief compliance and legal officer.
In a note to clients Thursday, Cantor Fitzgerald analyst Laura Champine said the hire "filled a necessary executive void." Champine upgraded her investment rating on the company's stock to a "Buy" from "Hold" and raised the stock's target price to $18 from $15. A representative from Lumber Liquidators did not immediately respond to a request for comment.
Shares of Lumber Liquidators Holdings Inc., based in Toano, Virginia, rose $1.88, or 13.2 percent, to $16.09 in morning trading. Its shares are down about 75 percent since the beginning of the year.