Costco downgraded to Equal Weight from Overweight at Wells Fargo

Wells Fargo analyst Edward Kelly downgraded Costco Wholesale to Equal Weight from Overweight with a price target of $490, down from $600. The analyst sees a "number of hurdles" in the company’s path and calls Costco a "rich multiple stock." The company’s comps carry risk of slowing more than anticipated on food "dis-inflation," the lapping of outsized traffic gains in gas, and a weakening consumer, Kelly tells investors in a research note. An eventual pullback in fuel margins and currency exposure could add further pressure to Costco’s momentum, says the analyst. Kelly sees more risk to consensus estimates than potential upside going forward.