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Caterpillar and Cracker Barrel Old Country Store have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – December 27, 2022 – Zacks Equity Research shares Caterpillar (CAT - Free Report) as the Bull of the Day and Cracker Barrel Old Country Store (CBRL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla (TSLA - Free Report) , Arkk Innovation ETF (ARKK - Free Report) and Paypal (PYPL - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

The Zacks Industrial Products sector has performed relatively well in 2022, down roughly 12% and outpacing the S&P 500.

A behemoth in the realm, Caterpillar has seen its near-term earnings outlook improve over the last several months, landing the stock into the highly-coveted Zacks Rank #1 (Strong Buy).

Caterpillar is the world's largest construction-equipment manufacturer. We see its iconic yellow machines at nearly every construction site.

Let's take a closer look at how the company currently stacks up.

Strong Share Performance

CAT shares have been notably strong in 2022, up more than 15% and crushing the S&P 500's performance.

Undoubtedly a major positive, shares are inching toward all-time highs. Stocks making new highs tend to make even higher highs, especially when positive earnings estimate revisions roll in from analysts.

Solid Growth Outlook & Quarterly Performance

Caterpillar has a strong growth profile, with earnings and revenue forecasted to soar 28% and 15.2% in FY22, respectively.

In addition, the company has been on a strong earnings streak, exceeding the Zacks Consensus EPS Estimate in ten consecutive quarters.

Just in its latest release, the company registered a 24% bottom-line beat paired with a 4.5% sales surprise.

Consistent Dividends

For the cherry on top, Caterpillar is a Dividend Aristocrat; 2022 marked the company's 29th consecutive year of increased dividend payouts.

Caterpillar's annual dividend currently yields 2%, modestly higher than its Zacks sector average. Impressively, CAT has grown its payout by 9% over the last five years.

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Caterpillar would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).

Bear of the Day:

The Zacks Retail and Wholesale sector has struggled to find traction in 2022, slipping nearly 30% and widely underperforming relative to the S&P 500.

A highly-popular stock in the sector with a unique business approach, Cracker Barrel Old Country Store, has seen its near-term earnings outlook shift negative, pushing the stock into a Zacks Rank #5 (Strong Sell).

Cracker Barrel Old Country Store is engaged in the ownership and operation of full-service restaurants with a restaurant and a retail store in the same unit. Let's take a closer look at how the company currently stacks up.

Share Performance

Cracker Barrel shares have experienced adverse price action year-to-date, down 21% and modestly underperforming relative to the S&P 500.

And over the last month, shares are down more than 15%, indicating that sellers have been in control.

Quarterly Results

Cracker Barrel has primarily exceeded earnings expectations, penciling in three EPS beats across its last four releases.

Still, the one miss came in its latest quarter, when CBRL fell short of earnings expectations by more than 20%. Quarterly revenue was reported marginally above expectations.

Growth Outlook

CBRL's earnings are forecasted to pull back roughly 5% in its current fiscal year (FY23) on top of Y/Y revenue growth of more than 6%.

Earnings growth looks to resume in FY24, with the Zacks Consensus EPS Estimate of $7.02 suggesting a 21% Y/Y change.

Bottom Line

A wide bottom line miss in its latest quarter and negative earnings estimate revisions from analysts paint a challenging picture for the company in the near term.

Cracker Barrel Old Country Store is a Zacks Rank #5 (Strong Sell), indicating that analysts have lowered their bottom-line outlook across the last 60 days.

For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.

Additional content:

Tesla: Bull vs. Bear Case

If you follow markets, it should be no secret that Tesla stock rapidly declined over the past year. While the S&P 500 Index is down 18.2%, shares of Tesla are down a whopping 63.6%.

What has led to the downfall?

·      Macroeconomic Conditions: Electric vehicles are a want rather than a need. While EVs have drastically come down in price since Tesla launched the Model 3, most traditional internal combustion engine-powered automobiles are more affordable. In other words, when the consumer is crushed by inflation, debt, and higher unemployment, purchasing an EV becomes less attainable.

·      Tax Selling: As the year ends, investors are taking inventory of the portfolio and are tax harvesting losing positions. In recent weeks, tax harvesting may have snowballed the selling behind shares in Tesla shares as many institutional investors and retail investors are stuck in underwater positions. As a result, active ETFs such as the Arkk Innovation ETF may be forced to sell shares at some point.

·      Concerns Over Management: It's hard to argue with CEO Elon Musk's business prowess. The controversial CEO is the mastermind behind Paypal, SpaceX and several other successful ventures which propelled him to be one of the wealthiest humans ever to exist. Nevertheless, his actions and words in recent months have spooked investors. First, Musk acquired Twitter. In acquiring Twitter, shareholder concern about Musk's time allocation began to increase.

While Musk is known to juggle several ventures at once, the Twitter acquisition is his most immense undertaking yet. Second, Elon has been selling shares to pay for the Twitter acquisition. Insider selling is never looked at as a positive by shareholders. Lastly, the billionaire CEO has warned the public consistently about the potential for a "hard landing" caused by the Federal Reserve's monetary policy.

What do bulls have to hang their hats on?

·      Potential Capitulation Volume: Thursday, Tesla traded a whopping 205 million shares. The last time Tesla stock traded that many shares was in the middle of the Covid panic in March 2021.

·      Deeply Oversold Levels: The Relative Strength Index (RSI) is a technical indicator that analysts use to measure a stock's current and historical strength or weakness using closing prices over a recent trading period. Since its inception, TSLA has only had a more oversold reading than today in 2019. After the instance in 2019, shares multiplied twentyfold.

·      Stopping the Bleeding:Thursday, Elon Musk tried to instill investor confidence by saying that he will "not sell shares of TSLA stock until 2024 or 2025."

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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