5 Stocks To Watch Before The Market Opens On Tuesday
Estimize | Dec 19, 2016 11:47PM ET
BlackBerry (NASDAQ:BBRY): The widespread adoption of iPhone and Android powered devices over the past decade have rendered Blackberry handsets obsolete. Its latest attempt at reviving phone sales, the Priv, fell flat despite some initial optimism around its release. It’s become clear that Blackberry (TO:BB) can no longer compete in these markets and as a result the company decided to outsource production of its handsets to Chinese manufacturer, TCL. All’s not lost though. Blackberry currently operates a thriving software and services sector that will continue to keep financial performance afloat. Last quarter the software segment grew by 111% and should continue to drive future growth. Blackberry will see some ongoing challenges as it shifts its business model including increasing competition and macroeconomic uncertainty.
Carnival Cruise Line (NYSE:CCL): Travel trends made significant strides in the past six months on improving economic conditions and consumer confidence. Carnival (LON:CCL) , in particular, is looking to build on these ongoing trends along with its better than expected third quarter. Last quarter the company posted better than expected results on both the top and bottom line. Management expects the combination of discounting, marketing initiatives and a better booking environment will propel performance in the fourth quarter. Carnival still faces a number of near term challenges including currency headwinds created by a strong dollar, increasing fuel costs and a slowdown in Chinese travel. Given how early Carnival reports in the season, today’s report could set the tone for the rest of the travel industry.
Darden Restaurants (NYSE:DRI): Darden is rolling into its fiscal second quarter report with mixed expectations. While earnings have topped analysts estimates in each of the past 2 quarters, revenue has failed to make its marks. Overall, same store sales still increased by 1.3% in the first quarter thanks to a 2% increase from Olive Garden and nearly 4% for Bahama Breeze. The Capital Grill and Eddie V’s remained areas of weakness with comparable sales dropping over 1% for each brand. Ongoing initiatives to implement technology and menu innovation should help the top line in the quarter to be reported. On the downside, increasing labor costs, currency headwinds and the recent departure of Starboard Value could have an adverse impact on performance. The stock is up nearly 20% this year with a majority of those gains coming following the election.
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General Mills (NYSE:GIS): Momentum is on General Mills ’ side as it heads into its second quarter report this morning. Earnings and sales figures topped analysts’ estimates in each of the past 2 quarters on the success of its natural and organic product portfolio. That said, slumping sales from its yogurt and processed food businesses will hamper financial performance. Analysts at Estimize expect General Mills to maintain its year-over-year declines due to changing snacking habits.
CarMax (NYSE:KMX): CarMax fell short of analyst’s targets in each of the past 2 quarters due to the improvements in the new car market. Low interest rates and gas prices typically drive new car sales higher and the market for repairs and parts lower. In all likelihood CarMax will be headed for another weak report because of this ongoing trend. Fortunately, the recent rate hike along with steadily rising gas prices will drive future growth. Shares have rallied in the second half of the year but historically remain flat following an earnings report.
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