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Comerica, Casey's General Stores, Apple, Facebook and Twitter highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL - December 14, 2016 - Zacks Equity Research highlights Comerica Inc. (NYSE: CMA - Free Report ) as the Bull of the Day and Casey's General Stores, Inc. (NASDAQ: CASY - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple (NASDAQ: AAPL - Free Report ), Facebook (NASDAQ: FB - Free Report ) and Twitter (NYSE: TWTR - Free Report ).

Here is a synopsis of all five stocks:

Bull of the Day :

Comerica Inc. (NYSE: CMA - Free Report ) recently reiterated its 2016 outlook as the energy industry stabilizes. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in 2017.

Comerica is a Dallas-based bank with commercial and consumer banking and wealth management divisions. Founded in 1849 in Detroit, it has operations in Arizona, California, Florida, Michigan and Texas with 473 banking centers.

As of Sep 30, 2016, its total assets were $74.1 billion. It is among the 25 largest US financial holding companies.

Re-affirmed 2016 Guidance

On Dec 5, 2016, ahead of an investor conference, Comerica released a fourth quarter mid-quarter update on its business.

While the average loan balance was down $400 million to $48.8 billion through the first two months of the quarter, the bank still re-affirmed its full quarter guidance.

Energy was in focus as the bank, given its Texas affiliations, has 200 energy customers. The energy loan balances were actually up quarter-to-date by 1.6%, or $39 million. That may not seem like much but many analysts had expected flat to lower balances.

However, the stabilization of crude around $50 has put some life back into the energy companies. They are starting to invest in their businesses again and that means they'll need capital.

Big EPS Growth Expected in 2017

The analysts like what they're hearing about 2017.

10 estimates were revised higher for 2017 in the last 60 days with one raising in the last week.

The 2017 Zacks Consensus Estimate has jumped to $3.93 from $3.54 in the last 2 months. That is earnings growth of 32.4% compared to 2016.

You can see the earnings growth explosion over the last 3 years.

2015 earnings: $2.92

2016 expected earnings: $2.97

2017 expected earnings: $3.93

Wait For a Pull Back?

Shares have exploded higher in 2016, especially since the election when the 10-year treasury moved sharply higher.

They're up 61% year-to-date and 14.6% in the last month.

Is it too much too soon?

Comerica now trades with a forward P/E of 23. While P/Es aren't as great of a valuation indicator for banks, this is still high compared to its peers which trades on average of 17.

I would be a buyer on any big pullbacks. Shares have weakened a bit off the recent highs, which is also presenting an opportunity.

It does pay a dividend, currently yielding 1.3%.

But you're not in it for the dividend. You're in it for the earnings growth.

For those investors looking for a regional bank that is on the upswing, Comerica is one to keep on your short list.

Bear of the Day :

Casey's General Stores, Inc. (NASDAQ: CASY - Free Report ) is struggling as its pizza business slowed last quarter. This Zacks Rank #5 (Strong Sell) is expected to see an earnings decline this fiscal year.

Casey's owns over 1,900 convenience stores in 14 Midwestern states. It offers self-service gasoline, groceries and prepared foods, including its famous made-from-scratch pizza and donuts, chicken tenders and sandwiches.

It is focused on small town America, with 57% of its stores located in areas with populations under 5,000 people.

This combination means it is the 5th largest pizza chain in the United States as it operates in cities that don't have a lot of other chain restaurant businesses.

Missed for the Third Quarter in a Row

On Dec 7, Casey's reported its fiscal second quarter 2017 results and missed on the Zacks Consensus for the third consecutive quarter. Earnings were $1.44 versus the Zacks Consensus of $1.57.

It was an 8% miss.

The second quarter fuel margin was 6.1 cents per gallon lower than the 24.7 cents per gallon record in the year ago quarter. This impacted second quarter earnings by a whopping $0.52.

But the convenience store business saw soft business in the quarter. Same-store grocery sales were up just 3.1% even though the company has an annual goal for 6.2%. Casey's blamed it on a slowing of in-store traffic and consumer reluctance to spend in the quarter, which ended before the election on Oct 31.

Many retailers blamed slowness in the fall on election worries.

Additional content:

Tech and Trump: Can They Find Common Ground?

Tomorrow, all eyes will be on New York City's Trump Tower as President-Elect Donald Trump sits down with Silicon Valley's top tech leaders. While the meeting's agenda has yet to be disclosed, it is safe to assume themes like job creation, immigration, regulation, and encryption will all be likely discussion topics.

It's been well documented that the vast majority of Silicon Valley leaders opposed Trump during the presidential election, with some helping and fund-raising for Democratic nominee Hillary Clinton during her campaign. The Obama administration has acted largely favorable towards large tech corporations over the years, from its "net-neutrality" policy-which requires internet providers to treat all web traffic equally-to its hands-off tactics to the tech industry's growing concentration of power.

Joining Trump on his side of the table will be Reince Preibus, his chief of staff, son-in-law Jared Kushner, and key transition team member Peter Thiel, a tech investor who was one of the few Silicon Valley names to support Mr. Trump.

Expected tech executives include:

  • Apple (NASDAQ: AAPL - Free Report ) Chief Executive Tim Cook

  • Facebook (NASDAQ: FB - Free Report ) Chief Operating Officer and Lean In author Sheryl Sandberg

  • Microsoft CEO Satay Nadella

  • Amazon CEO and The Washington Post owner Jeff Bezos

  • Tesla Motors CEO Elon Musk

  • Alphabet CEO and Chairman Larry Page and Eric Schmidt

  • Intel CEO Brian Krzanich

  • IBM CEO Ginni Rometty

  • Oracle co-CEO Safra A. Catz

  • Cisco CEO Chuck Robbins

Surprisingly, Twitter (NYSE: TWTR - Free Report ) CEO Jack Dorsey will not be present at the meeting, given how much Mr. Trump prefers the social networking platform over others.

Many of these tech companies, including Facebook, Amazon, Apple, and Microsoft, saw their shares slide the day after the election on worries that a Trump presidency would negatively affect their manufacturing and product distribution methods here in the U.S. and especially abroad.

One area of common ground, however, could be tax reform. According to the Wall Street Journal , the president-elect is "expected to promote corporate tax reform, which, depending on the details, could enable U.S. tech companies to bring home hundreds of billions of dollars they currently hold offshore."

The meeting is set for 2:00pm on Wednesday afternoon, and the world will be watching, waiting to learn all the minute details, hoping for, at least, some agreement on key issues, and realizing that the tech industry and Mr. Trump may need more from each other than either is willing to give.

Stocks that Aren't in the News…Yet

You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015, with a stellar average gain of +26% per year. See these high-potential stocks now >>

Get today's Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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COMERICA INC (CMA): Free Stock Analysis Report

CASEYS GEN STRS (CASY): Free Stock Analysis Report

APPLE INC (AAPL): Free Stock Analysis Report

FACEBOOK INC-A (FB): Free Stock Analysis Report

TWITTER INC (TWTR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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