Roth/MKM downgraded Costco Wholesale (NASDAQ:COST) from a Neutral to a Sell rating. The firm also significantly reduced its price target. The new target stands at $769.00, down from the previous $906.00.
This decision comes despite Costco’s recent first-quarter earnings beat. Roth/MKM based its action on concerns over the retailer’s underlying metrics.
Analysts cited observations of fading renewal rates and a slowdown in paid memberships. They noted that membership growth may have turned negative in the last quarter when adjusted for new store openings.
This analyst action contrasts with other firms that maintained ‘Buy’ ratings following the earnings report. The move highlights differing views on the company’s near-term growth prospects.