Merrill Lynch downgraded RadioShack (RSH ) to near-term neutral from accumulate.
Analyst Peter Caruso says lower-than-expected sales marks another discouraging development. He thinks the trend is due to a lack of share gains in existing categories and ebbing demand cycle for past growers like satellite TV and wireless phones.
Caruso says more wireless competition from Wal-Mart presents a potentially challenging Q4. He adds that visibility on RadioShack earnings is declining, in contrast to many other retailers, and he sees a multiple downside in the low teens. Caruso kept his long-term accumulate rating.