Jefferies downgraded Compass Diversified due to investigation, slashing target to $7.30

From Yahoo Finance: 2025-06-23 11:28:00

Jefferies downgraded Compass Diversified (NYSE: CODI) from Buy to Hold, lowering its price target from $28 to $7.30. The stock has dropped over 68% in the past six months due to an investigation involving its Lugano subsidiary’s former CEO, accused of unauthorized funding and inventory manipulation. Recovery is expected to be long and uncertain, prompting Jefferies to assign zero value to Lugano in its analysis.

The investigation into Lugano’s former CEO’s actions led to an overstatement of inventory, casting doubt on the subsidiary’s reported performance. Jefferies is awaiting more information before reassessing CODI’s upside potential, as there is little clarity on how the situation will evolve.

While acknowledging CODI’s investment potential, Jefferies believes other AI stocks offer greater promise with less downside risk. The firm has pulled back its rating on CODI and is monitoring the situation closely for further developments. No promotional content was included in the article.



Read more at Yahoo Finance: Jefferies Cut Compass Diversified to Hold in Early June, Slashing Target to $7.30