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Cracker Barrel, Norfolk Southern, Alphabet, Mercadolibre and Groupon highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL - February 01, 2016 - Zacks Equity Research highlights Cracker Barrel ( CBRL ) as the Bull of the Day and Norfolk Southern ( NSC ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet Inc. ( GOOGL ) , Mercadolibre, Inc. ( MELI ) and Groupon, Inc. ( GRPN ).

Here is a synopsis of all five stocks:

Bull of the Day :

Forget about the recent bump up in oil prices , the price of gasoline at the pump is collapsing to levels unseen in years. And with broad economic factors at play-- such as increased Iranian production or a lack of coordination from OPEC-- oil could stay low for quite some time.

While this could be bad news for people involved in the oil industry, it looks to be great for those in the restaurant business. With extra discretionary income consumers seem poised to spend it at places like restaurants, making Cracker Barrel ( CBRL ) an interesting choice for investors ahead of its earnings report next month.

CBRL in Focus

Cracker Barrel is a potential top play for low gas prices because so many of its stores are along interstate highways. Since pretty much everyone needs to drive to get to a Cracker Barrel Old Country Store, the company could be a prime beneficiary of lower gasoline costs for the average customer.

Analysts seem to agree with this line of thinking as we have seen some movement in the Zacks Consensus Estimate, as well as positive earnings estimate revisions as of late. Current projections now bake in an 8% growth rate for both the current year and the next year time frame, while there has been 100% agreement from analysts in this time periods too.

Earnings Season

It is also worth noting that CBRL currently has a very positive Zacks Earnings ESP, over 3% right now. When you add this to Cracker Barrel's Zacks Rank #1 (Strong Buy), you have a very good case for an earnings beat at the upcoming report.

Plus, the company has a great track record at earnings season, including an average beat of over 9% in the past four reports. CBRL has clearly shown it can live up to lofty expectations and analysts are really liking the story heading into the upcoming earnings report for this top ranked stock.

Bear of the Day :

It has been an absolutely brutal time to be in the railroad industry. Concerns over global economic output and commodity demand have hit this space hard and made it one of the worst major performers. Now, investors also have to contend with a sluggish U.S. economic outlook too, making it a very risky time to be in the space.

And while investors have already seen big losses here, there are plenty of reasons to think that more pain could be ahead. After all, the industry rank here is in the bottom 5% of the overall market, suggesting that even companies like Norfolk Southern ( NSC ) could be in for more turbulent trading in the weeks ahead.

NSC in Focus

Norfolk Southern is one of America's leading railroads and was certainly in-focus at its latest earnings report. The company reported a very soft quarter though, as EPS was down over 26% year-over-year, while revenues plunged double digits too.

A big reason for this hit was slumping coal volumes as this key area of the business fell more than 20% (year-over-year). However, the general business wasn't looking too hot either as this fell 9.3% when compared to the year ago period. The coming quarters aren't looking much better, at least if take a closer inspection of NSC's recent earnings estimate revisions from analysts.

Recent Estimates

Thanks to the tough competitive environment, analysts have been racing to slash their estimates for NSC stock. Not a single analyst in our consensus has raised estimates in the past two months for either the next year or current year periods, compared to several lower.

This is having a big impact on the consensus estimate too, as this has really been falling as of late. The full year consensus has declined by 6.8% in the past sixty days while the next year consensus has slumped by about 7% in the same time frame.

Additional content:

Alphabet Changes Reporting Segments Prior to Q4 Earnings

Investors are waiting for Feb 1 as Alphabet Inc. ( GOOGL ) is going to report fourth-quarter results.

Prior to the announcement, Alphabet declared that it will report the financial results under a new format, especially the segmental performance.

More on the New Format

Alphabet will report the financial results under two segments - Google and other businesses.

The Google segment will include the results of its main Internet and related businesses like Search, Ads, Commerce, Apps, YouTube, Cloud, Android, Chrome and Google Play. Hardware products like Chromecast, Chromebooks, Nexus and its virtual reality offerings will also be reported under this segment.

Coming to its other segment - Other Bets will incorporate Alphabet's other businesses such as Access/Google Fiber, Next, Calico, Verily, Google Capital and X.

For both the segments, the company will report revenues, segment operating income / (loss), excluding stock-based compensation expense, stock-based compensation, segment operating income / (loss), capital expenditures and depreciation, amortization and impairments.

Alphabet also plans to provide historical segment information for all the quarters of 2015, the fourth quarter of 2014 and full years 2013, 2014 and 2015 in the upcoming earnings release.

The search giant also said that there would be no alteration to its consolidated reporting; however, there will be some changes in the revenue breakout.

Conclusion

Ever since Alphabet completed the restructuring in October, it has been working toward making essential internal changes to ensure transparency in its financial results for shareholders.

Per Alphabet Chief Accountant Amie Thuener, the public holding company's structure is expected to "bring increased focus, accountability and transparency…"

Alphabet currently carries a Zacks Rank #2 (Buy).

Investors may consider stocks such as Mercadolibre, Inc. ( MELI ) and Groupon, Inc. ( GRPN ). While Mercadolibre sports a Zacks Rank #1 (Strong Buy), Travelport and Groupon have the same Zacks Rank as Alphabet.

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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 the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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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.

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CRACKER BARREL (CBRL): Free Stock Analysis Report

NORFOLK SOUTHRN (NSC): Free Stock Analysis Report

ALPHABET INC-A (GOOGL): Free Stock Analysis Report

MERCADOLIBRE IN (MELI): Free Stock Analysis Report

GROUPON INC (GRPN): Free Stock Analysis Report

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Zacks Investment Research

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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