Barclays downgrades Apple stock on demand concerns

Apple Inc. (NASDAQ: ) shares fell 3% today after Barclays downgraded it, citing continued weak demand for the tech giant’s products from iPhones to Macs ahead of 2024. The outlook for the year is bearish. This is the second downgrade. Apple shares have a “sell” rating and the number of bearish recommendations on the stock is now the highest in at least two years, according to data from the London Stock Exchange.

The company has faced slowing demand since early last year and its holiday quarter sales forecast fell short of Wall Street expectations. In addition, competition from China, especially the resurgence of Huawei, has also increased pressure on Apple.

In a report to clients, Barclays expressed pessimism about the sales prospects of the iPhone 15 and predicted similar results for the upcoming iPhone 16, pointing to a combination of factors such as weak market demand, China’s development and difficulties. The brokerage also highlighted growing risks to Apple’s services business, which has come under scrutiny for its App Store practices in several countries, including the United States. Although the services unit has generally grown faster than Apple’s hardware growth in recent years and accounts for nearly a quarter of the company’s total revenue, concerns remain.

Today’s share price decline is expected to reduce Apple’s market value by approximately $90 billion. By comparison, the stock surged nearly 50% in 2023 and hit an all-time high in mid-December, driven by a broad rally in large-cap tech stocks.

Barclays adjusted its stance on Apple to “neutral” from “neutral” and slightly lowered its 12-month price target to $160 from $161. Prior to today, the only bearish rating on Apple as of July 2022 came from Itau BBA.

Despite the downgrade, analysts still have a unanimous “buy” rating on Apple, with an average price target of $200. The company’s shares currently trade at about 28.7 times forward 12-month earnings estimates, well above the S&P 500 average of 19.8 times.

Barclays analyst Tim Long gave Apple a two out of five stars for the accuracy of its forecasts, according to London Stock Exchange Group (LSEG) data, and is one of the few stocks to weigh in on the tech giant’s performance. One of the more cautious analysts.

Reuters contributed to this article.

This article was created and translated with the help of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.