Lumber Liquidators Set to Close Above Key Trendline for First Time in a Year

Analysts look to be having a delayed post-earnings response

Managing Editor
May 1, 2019 at 10:38 AM
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Shares of flooring name Lumber Liquidators Holdings Inc (NYSE:LL) are up 5.2% at $13.91 this morning, after being handed no fewer than three bull notes right out of the gate. Loop Capital reiterated its "hold" rating on the stock, and lifted its price target to $11 from $10, citing modestly better-than expected results and potential long-term growth as its catalyst. Meanwhile, Raymond James upgraded to "outperform" from "market perform" alongside a $16 price target, and Stifel tacked on $3 to its former $9 price target. This upbeat analyst buzz comes one day after Lumber Liquidators reported a first-quarter loss that was wider than expected.

Analyst outlook was tepid coming into today, as all 12 firms covering LL sported "hold" ratings. Today's bull notes may have been well overdue, however, as the equity's average 12-month price target of $11.73 represents 15.6% downside to current levels.

Digging deeper, short-term LL options traders have been showing a preference for puts. The security's Schaeffer's put/call open interest ratio (SOIR) of 4.09 sits in the 98th percentile of its annual range, meaning short-term option players have rarely been more put-heavy during the past year.

Echoing this sentiment is the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which comes in at 1.96. This shows almost two puts have been purchased for every call in the past 10 days.

Lumber Liquidators is just off a long-term downtrend, turning higher just after hitting a 10-year low of $8.80 on March 18. In fact, following today's surge LL shares are on track to close above the 200-day moving average for the first time since January 2018.

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