LL Flooring downgraded to Sell at Loop Capital with ‘confidence waning’

Loop Capital analyst Laura Champine downgraded LL Flooring to Sell from Hold with an unchanged price target of $3 after the company recently rejected a $5.76 per share cash take-out offer from its founder. With existing home sales in decline and interest rates likely to climb, the firm sees “a tough macroeconomic environment” and forecasts LL generating $4M in free cash flow this year as it sells off inventory. The firm’s EPS estimate of ($1.48) for 2023 assumes the company generates losses “even in the seasonally strongest Q2” and while it is modeling sequentially improving sales this year, its “confidence is waning,” the analyst tells investors.