Lumber Liquidators' Stock Surges After Cantor Fitzgerald Upgrade

Lumber Liquidators Holdings Inc.'s stock surged 5.6% in premarket trade Thursday, after Cantor Fitzgerald upgraded the wood-flooring company, citing an appealing reward-versus-risk profile. Analyst Laura Champine raised her rating to buy about three months after lowering it to hold. She raised her stock price target to $18, which is 27% above Wednesday's closing price, from $15. She said that after a recent store tour with senior management, her long-term gross margin estimate may be too conservative. And Champine said she believes the company filled an executive void with the addition an experienced chief compliance and legal officer, when it announced earlier this week that it hired former Rayonier general counsel Jill Witter. "[Lumber Liquidators] still has a number of regulatory and legal hurdles to clear, but the stock appears washed out to us following its [year-to-date] performance," Champine wrote in a note to clients. The stock has gained 18% since closing at a more-than six-year low of $12.06 on Aug. 7, but was still down 79% year to date, while the S&P 500 has tacked on 1%. The stock started diving in late February, after a "60 Minutes" report alleged wood flooring the company sourced from China had dangerous levels of a cancer-causing agent.