Dallas, Texas 02/10/2014 (FINANCIALSTRENDS) – The $50 billion market capped discount and variety stores chain operator Costco Wholesale Corporation (NASDAQ:COST) has been attracting bad press over the past week. It started with the price target of its stock getting pegged downwards by brokerage firm Jefferies Group. The price target has been lowered to $105.00 from $107.00. At current price points, this new PT, translates into a 8.1 percent discount indicating a pronounced weakness in the stock over the next few quarters.
The downgrade came on the back of news on February 7th that Costco Wholesale Corporation (NASDAQ:COST) has received a demarche from the New York State Department of Environmental Conservation, ordering it to remove expediently and issue a nationwide recall of a banned pesticide which was being sold in its stores. The speciality retailer has also been ordered to pay a fine of $60,000 as penalty for allowing the sale of banned products.
The recall order and fine were levied by the New York State Department of Environmental Conservation after its investigations concluded that the tip off, they had received from a citizen of Long Island, alerting them to the likelihood of a banned insect killing pesticide “Bayer Advanced Lawn Complete Insect Killer” being sold in operator Costco Wholesale Corporation (NASDAQ:COST) store in Long Island proved to be true.
It is appropriate to note here that the Bayer Advanced Lawn Complete Insect Killer pesticide containers come with a external label which clearly and legibly indicates that the pesticide is , “Not for sale, sale into, distribution and or use in Nassau, Suffolk, Kings and Queens counties of New York.”
Providing more insights into the ban of this product in a limited geography, New York State Department of Environmental Conservation has issued a press release indicating that, “Long Island’s sole source aquifer is especially vulnerable to contamination, and DEC takes its responsibility to enforce environmental laws very seriously.”