Shares of Costco Wholesale Corp. slid 2% Monday, after BMO downgraded the stock, and said fears about competitive pressure from Amazon.com Inc. would likely outweigh the company’s strong fundamentals.

Analyst Kelly Bania cut BMO’s rating on the stock to market perform from outperform and lowered its price target to $160 from $185.

“Despite our continued belief that Costco’s COST, -0.86% outlook remains strong, the reaction to Costco’s impressive June comp figures (stock down ~2.5% in the past two days) suggests that investor sentiment, driven by Amazon AMZN, -1.78% fears, may continue to overshadow strong fundamentals,” Bania wrote in a note. “In this asymmetrical environment, we believe its difficult to argue that the stock will outperform despite our continued outlook for comp upside and strong fundamentals.”

Costco reported a 7% rise in net sales in June to $12.17 billion. Same-store sales rose 6% in the month and were up 6.5% in the U.S. alone. For the 44-week period to July 2, sales climbed 6% to $104.28 billion.

The retail sector has been rocked by the growing encroachment of Amazon and other online sites into the space. Amazon’s recent $14 billion bid for Whole Foods Market Inc. US:WFM has raised a fresh round of worry about the impact a deal would have on the grocery and supermarket sector given the e-commerce giant’s aggressive low-price strategy.

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“ “Despite our continued belief that Costco’s outlook remains strong, the reaction to Costco’s impressive June comp figures (stock down ~2.5% in the past two days) suggests that investor sentiment, driven by Amazon fears, may continue to overshadow strong fundamentals.” ” — Kelly Bania, analyst, BMO Capital Markets

The perception of Amazon as an unstoppable force is making it hard for investors to appreciate Costco’s strengths. The wholesaler is actually cheaper than Amazon, according to three studies conducted by BMO. In a study published in January, BMO compared the price of 60 items from the household consumable, grocery and discretionary categories at Costco and Amazon Prime and found in Costco’s favor. The company’s prices were 16% cheaper than Amazon Prime’s and the price gap was as high as 26% in household consumables.

Bania said the return of inflation could impact Costco’s margins in the coming quarters, as the company typically waits before raising prices to combat rising input costs.

“Under normal circumstances, we would expect investors to overlook near-term inflation-driven transitory GM% (gross margin) pressure, but given investors hyper sensitivity in an Amazon-fear dominated market, we see risk that GM% pressure (though likely short-term in nature) could add further pressure to the stock and may provide a better re-entry point,” said the analyst.

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Not everyone is bearish on the stock, however. On Friday, J.P. Morgan reiterated its overweight rating on Costco stock, and said it remains a top pick.

“We believe the business momentum should persist as we continue to lap tobacco and stepped-up deflation headwinds that emerged at a similar time one year ago,” analysts wrote in a note.

Costco stock has fallen 5.7% in 2017, while Amazon has gained 32% and the S&P 500 SPX, -1.11% has gained 8%. The SPDR S&P Retail exchange-traded fund XRT, -0.29% has fallen 12%.

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