Compass Diversified slides after Jefferies downgrades to 'hold'

Shares of Compass Diversified CODI.N, which invests in middle-market businesses, slide 9.9% to $6.47

Jefferies downgrades CODI to "hold" from "buy" given material uncertainty from ongoing investigation at the company's Lugano arm

CODI last month disclosed "non-reliance" on its FY 2024 financial statements amid concerns of irregularities in Lugano’s accounting and inventory practices

Jefferies cuts PT to $7.30 from $28, which is still a 1.7% upside to stock's last close

Brokerage says risk-reward currently balances unfavorably, given the depth and breadth of unresolved uncertainties

2 of 5 brokerages rate the stock "buy" or higher and 3 "hold"; median PT is $18 — data compiled by LSEG

As of last close, CODI stock down 68.9% YTD