As investors wait for earnings season to give them the latest readings on how major companies are doing, Wall Street analysts haven’t been afraid to give their own advance views. Apple (NASDAQ: AAPL) earned favorable comments from stock analysts, but health insurance companies like UnitedHealth Group (NYSE: UNH) face some difficult challenges that could hold back their share prices in the immediate future.

Could an Apple a day keep your portfolio healthy?

Shares of Apple were up 2% Monday morning after the mobile device maker got favorable comments from analysts at J.P. Morgan. The Wall Street giant repeated its overweight rating on Apple’s stock, and it boosted its price target to $265 per share.

Most of the comments that J.P. Morgan made centered on the recent release of the iPhone 11 lineup of smartphones. The analyst firm believes that iPhone shipments could total 185 million in 2019. That figure could end up challenging the 200 million mark by next year, although J.P. Morgan thinks it’ll likely fall just short of that level.

Other analysts have seen Apple’s ambitious moves on the price front as playing a key role in its future success. Although Apple set prices for the higher-end 11 Pro and 11 Pro Max at around $1,000 or higher, the regular iPhone 11’s $699 figure is an attractive price point that will resonate with users of previous models who are looking to upgrade. Healthier trade-in allowances are also likely to contribute to sales.

Many have criticized Apple for giving up innovation in favor of simply churning out new versions of existing products with minimal upgrades. Yet with others pointing to new camera features and enhanced battery life, Apple could well have a hit on its hands.

UnitedHealth looks a little ill

Meanwhile, shares of UnitedHealth Group were little changed Monday morning. The health insurance giant was the subject of negative comments from analysts at BMO Capital, who also cited Humana as suffering from some of the same headwinds.

BMO Capital cut its rating on the two insurers from outperform to market perform, and the primary reason had to do with their Medicare Advantage offerings. Medicare Advantage is an alternative to traditional Medicare that private health insurers can offer, with guidelines for minimum coverage options set by the federal government. These programs have been profitable for insurers, but BMO Capital fears that calls for healthcare reform could jeopardize the relatively rich profit margin figures that health insurers have collected from offering Medicare Advantage programs.

UnitedHealth in particular has concentrated much of its attention on Medicare Advantage, and it’s been highly successful at wooing new customers. With demographic trends seeing a flood of baby boomers reaching retirement age, growth in the Medicare category looks a lot more attractive than the private sector.

There’s plenty of uncertainty about what will happen with healthcare reform in Washington. Despite analyst calls to the contrary, UnitedHealth has weathered past storms, and long-term investors might well conclude it will be able to do so again this time.

The post Stock Market News: Apple Gets a Boost; UnitedHealth Has a Sick Day appeared first on The Motley Fool Canada.

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Even with today’s gains, businesses are still struggling to come up with the best strategies to maximize their prospects. AT&T (NYSE: T) is once again in the spotlight as investors try to guess whether it’ll make a major strategic move with its DIRECTV satellite video business. Meanwhile, Diageo (NYSE: DEO) gave a warning about the current state of global trade that suggests there are still reasons for concern across the broader stock market.

Is AT&T dealing DIRECTV?

Shares of AT&T were up about 1% in response to renewed reports that the telecom giant might be looking at a major strategic move involving its DIRECTV business. The possible outcome could be a sale or spinoff of DIRECTV — something that could help to boost its share price, at least according to activist investors.

Hedge fund Elliott Management said earlier this month that it sees AT&T shares as being greatly undervalued, and it took a stab at explaining why. One criticism of the telecom company was that because of its massive purchases of DIRECTV and Time Warner, AT&T had taken on too much at the same time, distracting it from its core business. Given the opportunities in building out an upgraded 5G wireless network, Elliott urged AT&T to take steps to refocus its efforts on its most promising business.

Selling off DIRECTV could be a step in that direction if AT&T chooses to do so. Proceeds from a sale would allow the telecom company to pay down some of its debt or provide additional capital for network improvements. It would also take away the company’s exposure to a declining market, as many DIRECTV customers have moved to cheaper streaming video services. With Elliott likely pushing for such a move, it’ll be interesting to see whether AT&T pulls the trigger on a DIRECTV deal — and whether it makes further efforts toward appeasing its new activist shareholder.

Diageo tries to stay upbeat

Spirits producer Diageo saw its stock rise a fraction of a percent Thursday morning. The company behind Guinness beer and Smirnoff vodka gave an update on the prospects for its business in the immediate future, and it remained confident despite rising challenges on the trade front.

Diageo said that it anticipates it will still be able to produce organic sales growth in a range of 4% to 6% for the full year. It also expects that its results for the first half of the fiscal year will see operating profit grow at a slightly slower rate than sales, although that’s largely due to tough comparisons against the prior-year period’s results.

Yet trade concerns remain an issue for the spirits maker. CEO Ivan Menezes urged investors not to assume that Diageo doesn’t have to worry about trade considerations, and he tried to assure shareholders that his team will keep monitoring such matters closely.

Even so, Diageo’s at the center of many major issues, including both the U.K.’s Brexit separation from the European Union and possible tensions involving the U.S. market. With ongoing challenges in navigating shifting consumer preferences with respect to alcoholic beverages, Diageo has a lot to balance in order to keep itself moving in the right direction.

The post Stock Market News: AT&T Mulls a DIRECTV Move; Diageo Faces Trade Challenges appeared first on The Motley Fool Canada.

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As investors wait for more signs about the likely future direction of the U.S. economy, a couple of key companies will release their latest financial reports this afternoon. Many people watch FedEx (NYSE: FDX) as an indicator of the amount of shipping activity going on in the broader global economy, and its earnings could say a lot about whether economic conditions will improve or deteriorate. Meanwhile, Adobe Systems (NASDAQ: ADBE) commands a valuable niche in the tech industry, and its efforts have been important in driving creativity and innovation across the globe.

Will FedEx deliver?

Delivery giant FedEx is slated to release its fiscal first-quarter financial results after the close of trading Tuesday afternoon. The company has gotten a lot of attention lately as it tries to navigate shifting trends in the shipping industry while maintaining its leadership position.

Investors seem nervous about what they’re expecting to see from FedEx. The current consensus forecast projects a nearly 9% decline in earnings per share, with revenue likely to remain flat compared to year-earlier results.

Yet the big question that most FedEx followers want answered is how its strategy in dealing with e-commerce giant Amazon.com will fare over the long run. As Amazon has developed its own delivery force, FedEx has gradually distanced itself from the online retail giant. After having chosen not to renew its express shipping contract with Amazon earlier this year, FedEx followed up last month by announcing it won’t renew its ground delivery contract, either.

FedEx is dealing with headwinds on multiple fronts, including trade-related disruptions and higher expectations among customers for fast shipping. If its financial report proves to be better than many currently anticipate, then it could signal economic strength not just in the U.S. but across the globe.

Adobe tries to get creative

Adobe Systems is also slated to release its latest quarterly results late this afternoon. The software specialist has worked hard for years to keep its status as a leader in helping to foster creative endeavors with its products, and Adobe’s work has led to a steady move higher in the stock price over the long run.

Investors have high hopes for Adobe and its fiscal third-quarter report. They’re looking for earnings growth of about 14%, with sales climbing at an even healthier 23% rate compared to year-ago levels.

Adobe’s recent results have built up optimism surrounding the company. In the fiscal second quarter, the software titan managed to post 25% year-over-year revenue growth, and multiple factors helped it boost its bottom line as well. An emphasis on digital media created substantial organic growth, and recent acquisitions helped to flesh out some of its software platforms. With a transition to a subscription model being largely complete, Adobe’s primary focus is to ensure that its offerings remain the state of the art, essentially forcing creative professionals to stick with the company for the foreseeable future.

Many subscription-based tech companies have seen their shares take a big hit in recent weeks, but Adobe has a longer history of success. It’s reasonable for investors to look for more of the same from Adobe on Tuesday afternoon.

The post Stock Market News: FedEx, Adobe Earnings on Tap appeared first on The Motley Fool Canada.

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