September 2017


New Costco deal with Citigroup seems to be getting costly as customers are not happy with the service

Costco Wholesale Corporation (NASDAQ:COST) customers have been put in rage by slow responses from Citigroup on their new credit cards been offered. According to Bloomberg reports, the customers have to face longer wait times and have trouble activating their new accounts.

Costco’s Facebook page was flooded with complaints regarding troubles users have to face in using their new Costco Anywhere Visa cards. The credit cards were supposedly available to be used from Monday. However, many customers are not happy with the service as millions of calls started coming in which Citigroup was not prepared for.

Costco replied on their Facebook page to calm customers down and an attempt to understand the problems they were facing with huge number of calls. They replied, “Due to high levels of interest in the Costco Anywhere Card and high volumes of calls from cardholders, callers to Citi should expect longer-than-desired hold times. Citi is reviewing processes and pulling in additional resources to alleviate hold times.”

Last year, Costco ended its 16-year long relationship with American Express as both the parties were not able to come up with a desirable card fees. Costco announced two months ago that Citigroup will become its exclusive card provider and Visa will replace its network with American Express. Recently, Costco sales declined and potentially the reason being the switch over of the credit card issues. That seemed like a temporary hit as analysts did expect it not to be too concerning for long-term prospects. However, the service end of the deal got caught up with millions of calls by customers of world’s largest whole sale club.

Citigroup spokesperson Jennifer Bombardier has apologized for the inconvenience to the customers. She also said that 11 million cards were issued by Citigroup and within two days they received 1.5 million calls. However, the call volumes are coming back to normal and customer needs are being met diligently. In addition, the online activation option is also available for customers which is a lot quicker for them and they don’t need to wait for a representative.

Analysts have been banking on Costco deal with Citigroup and Visa which could help the retailer cut costs. According to Morgan Stanley, Costco is charged $180 million a year on fees, while with Visa they can save up to $150 million in fee. A deal certainly beneficial for all three parties in the long term once the switchover is complete from the customer service end.

The new update brings significant changes to the game

It has been months since Rise of the Tomb Raider came out for Microsoft Corporation’s (NASDAQ:MSFT) Windows, but this has not stopped the developer responsible for the PC port from improving its performance. The latest patch for the game has brought significant performance improvements.

Patch number 1.0.668.1 adds multi-GPU support for SLI and Crossfire configurations in DirectX 12. The game will utilize CPU more efficiently leading to better framerates in game and players are less likely to be bottlenecked by the GPU, the developer noted. Perhaps the biggest improvement is the support for Asynchronous Compute. The feature has been an integral part of DirectX 12 API. It has the potential to yield better performance results and the patch adds support to Advanced Micro Devices, Inc.’s (NASDAQ:AMD) GCN 1.1-based GPUs and NVIDIA Corporation’s (NASDAQ:NVDA) newest Pascal-based GPUs.

Players might see better GPU utilization with Asynchronous Compute, but the feature will arguably once again play in favor of the red team. As it has been noted several times before, Asynchronous Compute benefits Radeon GPUs, while it has shown crippling performance on GeForce GPUs. This is due to AMD’s commitment to the feature, which dates back to Radeon HD 7970 and is now bearing fruits of the labor. Despite AMD’s better hardware support for Asynchronous Compute, NVIDIA insists the current GeForce drivers do not yet support the feature.

You can read the complete list of improvements and fixes coming with the patch here. The patch is live on Steam but Windows Store version will receive it a bit later. No date has been provided for it yet!

Apple continues to impress investors with persistent innovation in its products

Since its inception, Apple Inc. (NASDAQ:AAPL) has wowed its investors with its stock momentum and even now, it continues to show signs of rise from its lows in the quarters to come. Apple is working on launching new products successfully in the second half of FY16. With these launches, the tech giant is expecting to attain all-time highs and to revive its slow sales growth of the first half of FY16.

First to come is Apple’s iPhone 7. The company is all set to launch the new phone on September 7 of this year, which is considered as a highly important launch for the company, as it is aimed at setting its path to the right place with high earnings. The phone is also expected to improve the sales growth numbers of the tech giant.

Furthermore, with net sales declining for MacBook Pro, the company is planning to upgrade its MacBook Pro line. The upgraded laptops are expected to be thinner with OLED touch-screen strip for the function keys. They will have more powerful graphic processors than the old computers. The $584.31 billion company is expected to bring finger print technology to its notebooks which previously only existed in iPhones. This would make its notebooks securer than ever before.

Also, the upgraded MacBooks are expected to be equipped with Apple’s latest operating software, Sierra. The notebooks are expected to be launched later this year after the release of new Apple Watch and iPhone 7.

Innovation for Apple does not seem to end here. The company is also developing hollow batteries for its new self-driving electrical car, which would result in better cost efficiencies for the company. The news has already impressed the investors and they are looking forward to reaping positive gains from the company. The new battery would give the company an edge over other electric cars in the market. The much hyped-car is expected to be release by FY20-21.

Based on these innovations and product launches, investors have their hopes high for the future of California-based company. The stock reflects an upside potential of 15% to be achieved in the next 90 days. Therefore, the investors are bullish on the stock. It is trading up in the market by 2.6% year-to-date through Wednesday. S&P 500 and Dow Jones also show an increasing trend and are trading up 3.94% and 6.13% respectively, on YTD basis.

The stock of the California-based company is traded within a daily range of $107.76-108.9. The 52-week range is maintained at $89.47-123.82. The analysts believe that the stock has the potential to reach as high as $180 by FY17. The total shares outstanding for Apple are 5.39 billion, out of which 24 million are traded in the active market session.

FactSet Fundamentals analysts also share positive sentiments for Apple and have maintained 34 Buy, five Overweight, three Hold, one Underweight, and two Sell ratings on the stock. The consensus price set on this iPhone-maker is $121.6, depicting a potential of 12.59% above the last close.

The stock is not much appealing to dividend seeking investors

Analyst David Palmer at RBC Capital maintained outperform rating for Starbucks Corporation (NASDAQ:SBUX) stock in his research note. The rating in stock rating came ahead of company’s Biennial Analyst Day, which is scheduled to take place next week.

The analyst stated in his note that his data points towards a slow and sluggish start to the fiscal year. He believes that the consumer confidence is improving and the recent marketing tools deployed by the company could help in boosting its Same Store Sales (SSS) to witness a growth through the quarter end.

The analyst kept Price Target of $64 intact for the stock, presenting an upside potential of 10.27% from the current price of $58.04. The analysts at the Street seem to be bullish, with 14 out of 31 analysts at the Street rating it as Strong Buy, while 12 analysts presenting Buy rating. The consensus Price Target estimate for the stock is $64.12, with the highest and lowest target of $70.00 and $55.00 respectively.

Stock’s Year-to-Date (YTD) performance has been highly volatile, with a return of 3.35% in YTD trading. However, it started to gauge interests of investors, and increased by 10.51% in the past one month of trading.

The stock is not much appealing to dividend seeking investors, who require a high yield. Rather, it is more prone to be attracted by dividend growth investors. In the past five years, its growth has witnessed an increase by 284%. In each of the five years, it has witnessed an increase. Even in its quarterly results reported on November 3, it witnessed an increase of 25% on Quarter-over-Quarter (QoQ) basis. At price level of $55.77, the stock delivered a lucrative dividend yield of 1.79%.

User growth, gain in market share of online advertisements and monetization of previously untapped assets contributed to strong results

Facebook Inc. (NASDAQ:FB) posted Q1 earnings that conformed to analyst and investor expectations. Following the F8 conference, the analysts in general were very positive on the stock as the strategies and monetization policies introduced during the meet painted a very healthy long term growth story. The results will help the company gain investor trust and push for long term growth with investor consent.

The revenue for Q1 amounted to $5.38 billion beating the consensus of $5.25 billion with growth of 51.97% on y/y basis. The EPS amounted to $0.77 ahead of the consensus of $0.62 with 83.3% growth. Growth in mobile revenue was particularly strong and was reported at 76% y/y, while, the number of average daily users saw growth of 16.6%. The advertisement revenue growth was 63% exclusive of the Forex impact.

Raymond James analyst, Aaron Kessler expected Facebook to carry momentum from Q1 into Q2 with a healthy daily active user growth rate, continued increase in advertisement market share and increased monetization from Instagram and messenger. Facebook now has 1.65 billion global monthly active users showing growth of 14.8% y/y. The only negative thing for Facebook was softness in Oculus numbers which the company expects to decline further during 2016. The analyst remained largely positive on FB and raised his price target to $140.

Susquehanna analyst, Shyam Patil viewed the Q1 as another successful quarter for the company with excellent growth rates across the board. Facebook once again set the bar higher by beating fairly aggressive estimates. The operating expenditure is likely to grow by 50% during the latter half of the year owing to investments in core business and utility next generation services including WhatsApp, Messenger and Instagram. The analyst reiterated a positive rating on the stock and concluded his report with a PT raise to $145 from prior $140.

The analyst opinion for FB has 17 strong Buy, 29 Buy, three Hold and one Underperform. The stock price during the last pre market hour was $117.60.

There is strong demand for Sony’s upcoming headset

Digi Times mentioned news citing a report by Liberty Times on Sony Corp.’s (ADR) (NYSE:SNE) PlayStation VR headset. The firm has collected data from a Taipei-based research institute and the report says PlayStation VR is seeing stronger demand than what was expected. Due to this Sony is expected to ship six million units of PlayStation VR in 2016.

The headset opened up preorders earlier in June, and to no one’s surprise it was sold out within minutes. The reception was not surprising because the headset saw a similar reception in other territories. Amazon exhausted its first batch of preorders within 10 minutes of availability. Sony’s VR headset is a tough deal to get hands on.

The report reveals that Oculus is aiming to ship 2.3 million Rift units and HTC is aiming for 700,000 Vive units. The combined shipment of rival headsets is half of what Sony is planning to ship, which speaks about the higher demand of PlayStation VR. It could be due to the fact that Sony’s headset costs cheaper and every PlayStation 4 in the total 40 million install base is “VR Ready.”

Japanese-based research firm Nikkei has also reported that Sony’s estimated shipment for PlayStation VR headset is between 1-3 million units for the fiscal year 2016 which ends on March 2017. This will allow Sony to cash in a revenue of $400 – $1,200 million, the report says.

PlayStation VR is slated to launch on October 13. The PlayStation VR Bundle which includes the headset, a PlayStation Camera, two Move controllers and a copy of PlayStation VR retails for $499. The Core bundle that includes none of the aforementioned extras except the headset is priced at $399. It should be noted that PlayStation VR requires PlayStation Camera to work, so the final price lands in at $449.  

The Country Caller reviews whisper numbers for American Express and Qualcomm, both of which are headed to release their respective quarterly earnings after the closing bell today

Leading chip maker QUALCOMM, Inc. (NASDAQ:QCOM) and credit card maker American Express Company (NYSE:AXP) are about to release their results for their respective quarters after markets close today. Both the companies are expected to post mixed results this season, as the estimates suggest.


For its second quarter of fiscal year 2016, the chip maker is expected to post 96 cents in earnings per share, as the consensus says. While this lies within the company’s guided range of $0.90-1.00, calling for a 29-36% year-on-year decline, forecasts an EPS of $1.02, suggesting Qualcomm might beat the consensus on earnings this quarter.

The Street says Qualcomm would post revenues of $5.29 billion this quarter, in-line with its guided range of $4.9-5.7 billion. In contrast, Estimize says the company would beat the Street by posting $5.34 billion. The company’s guided range calls for a 17-29% YoY decline in its top line.

For its first quarter, Qualcomm reported an EPS of 97 cents, down 28% YoY. Sales for the quarter declined 19% from the year-ago period to $5.8 billion.

American Express

For the first quarter of fiscal year 2016, the consensus forecasts American Express to post $1.36 in EPS. In contrast, says the company is likely to surpass the consensus by one cent on this metric.

The consensus revenue estimate for 1QFY16 stands at $8.08 billion. says the company would rather miss the Street on revenues by posting a figure of $7.99 billion.

For 4QFY16, American Express reported an EPS of 89 cents, down 36% from the year-ago period. Its top line figure declined 8% YoY to $8.39 billion.

Amazon plans to introduce online store and brick-and-mortar outlets in Australia

Speculations suggest that, Inc. (NASDAQ:AMZN) is now looking to shift most of its attention toward Australia. With plans to open brick-and-mortar stores along with an online supermarket in the country, the online retail giant hopes to drive up its business against Australia’s local stores.

The company claims that customers who do not find their choice of items on shelves can simply make use of the online store in order to get their items delivered from its fulfillment centers. While the retail giant claims that its brick-and-mortar outlets will be smaller in size as compared to other Australian retail outlets, the shops will store some of basic items such as alcohol, fruit, meat, vegetables, and dairy. Considering that e-commerce titan might bring Amazon Fresh to Australia at some point in the future, the emergence of these brick-and-mortar stores may greatly excite Australians since it would be a stark indication of its new-found focus.

Furthermore, the company has made sure that its app enables users to vouch for options to either have their ordered items delivered to their doorstep, or prepped for pick up from Amazon’s drive-thru lanes. Since the online retailer remains one of the most dominant players in the industry today, we believe that its outlets and online store in Australia could greatly help ramp up on its number of users.

It also seems that Australia isn’t the only destination on the company’s bucket list. Alongside this, it has plans to eventually unveil Amazon Fresh service in South East Asia and Singapore. With Amazon Fresh’s advent earlier, it is evident that the retail giant hopes to expand its services around the globe in order to eliminate any chance of competition. Considering that Amazon thrives in markets due to its platforms such as Prime Now, Amazon Fresh, Amazon Prime, and more, we believe that its latest move will greatly excite many deprived Amazon-fans in Australia.

Tesla plans to recall all models of Model S produced between 2012 and 2016 in phases starting from February

Takata Corporation’s faulty airbag inflators led to the biggest ever automotive recall in the US which got even bigger in 2016 when 40 million more airbags were added, including some installed in the Model S, the all-electric luxury sedan by Tesla Motors Inc. (NASDAQ:TSLA). Given its size, the Takata airbag issue has resulted in the most complex recall ever.

After the National Highway Traffic Safety Administration (NHTSA) sends out guidelines to assist the process of recalling the vehicles based on their risk, Tesla will start replacing the passenger airbags in its older models of the sedan over the coming years, Electrek reported. The company technically required replacing the airbags in the Model S in regions with “high humidity,” but it opted for recall of all the vehicles, starting with the ones delivered in 2012.

Tesla contacted the Model S owners and told them that it will replace the airbags in every 2012 vehicle in the world, as customer safety is “paramount;” however, no incident related to airbag rupture has been reported. Starting from February, the company will recall 2012 models and then gradually move to all the other models produced till “late 2016.”

Interestingly, Tesla Roadster, the Model X, and 2017 Model S are not affected by the recall. According to the NHTSA, the airbags in vehicles built between 2013 and 2016 are “safe” and their owners have to wait for further notice from the company. Yet, the company will strive to “proactively” replace them, even before the NHTSA asks them for owners’ “peace of mind.”

The NHTSA said last year that a combination of environment, fluctuating high temperatures, and moisture degrades ammonium nitrate propellant in the airbag inflators. This can burn the propellant rapidly, rapture the inflator module, as well as send “shrapnel” via the airbag into the vehicle passengers. Interestingly, all the vehicles with Takata’s airbags are not equally dangerous or might not be dangerous at all.

Takata’s airbag has led to 10 deaths and over 100 injuries across the country. Thus, the company agreed to a settlement of $1 billion last week, which includes compensation for automakers and victims and a fine.

The drugmaker will have to seek more options to remain in the main frame of pharmaceutical industry and to face fierce competition

CVS Health Corp (NYSE:CVS) and Express Scripts Holding Company (NASDAQ:ESRX) shares plunged during the trading session on Thursday. This was because in recent news, Mylan NV (NASDAQ:MYL) was accused of dramatically raising the price of EpiPen during the past few years. Due to this, questions are arising about the difference between what consumers are being charged for EpiPen and what the company is earning. However, Leerink recommended buying the shares of CVS Health as the retail company is likely to benefit following the launch of generic EpiPen in the market.

Leerink analyst David Larsen believes that the healthcare company would be at an advantage amid rising pressure on Mylan due to EpiPen leading to changes in the way the pharmaceutical delivers the medicine. The West Virginia-based enterprise was recently questioned about the dramatic price hikes of EpiPen. It has been reported that the price of EpiPen has increased by approximately 548% to $608 since FY07 from just being $100 a few years ago.

Following this, the pharma company’s CEO stated that the net price that the $22.92 billion company receives is $274. It stated that such a large discrepancy occurs because the drug has to go through five hands before it actually reaches the patient. This implies that CVS health and Express Scripts and other pharmacy benefit managers are enjoying huge profits from EpiPen, despite their shares coming under pressure.

EpiPen is a life-saving drug used for treating allergic reactions. Due to the sensitivity of the drug, company’s CEO heather Bresch acknowledges that it is hard for patients to pay such huge amounts and they deserve more affordable care. As a result, the pharma company quickly responded that it is taking actions to improve consumer access to the drug by designing an effective patient assistance program. It said it would cover out-of-pocket cost at different pharmacies, leading to a decline in price for the patients. Also, it is further planning to provide the injection directly to the patients. However, the details are not so apparent and are subject to much criticism according to federal laws.

Even if Mylan carries on with its patient assistance programs and subsidizes the drugs, or new generic EpiPen is launched, either way, CVS pharmacies are in for reaping huge profits. Due to this, analysts are bullish on the pharma retailer. FactSet Fundamentals has readily given 17 Buy, three Overweight, and five Hold ratings for CVS pharmacies recommending investors to buy the shares of the retailer. The median price target of $112.76 depicts an upside potential of 20.24% above the closing price of Thursday.