Jefferies downgraded Compass Diversified (CODI) to Hold from Buy with a price target of $7.30, down from $28. The firm sees “material uncertainty” from the ongoing investigation disclosed at the company’s Lugano subsidiary. Lugano’s former CEO engaged in material unauthorized third-party funding arrangements and questionable inventory valuations, the analyst tells investors in a research note. Jefferies says its price target “conservatively assigns” zero value to Lugano, as recommended by management, given material overstatement of inventory and a lengthy recovery process.
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