Amidst the financial milieu, Apple Inc. (NASDAQ: AAPL) encountered a 3% descent in its stock valuation today. This downturn was ascribed to Barclays’ bearish prognostications for 2024, elucidating the tech titan’s sustained contraction across its product spectrum, ranging from iPhones to Macs. The rationale behind this contraction was attributed to a slump in consumer demand. Notably, this marks the second instance of an “sell” equivalent rating for Apple’s stock, thrusting it into the highest echelons of bearish recommendations in a span of at least two years, according to data from the London Stock Exchange Group (LSEG).
The company has grappled with dwindling demand challenges since the onset of the previous year, with its holiday-quarter sales forecast falling short of Wall Street’s optimistic projections. The landscape of competition, particularly from the resurgence of Huawei in China, has intensified the challenges faced by Apple.
In a missive to its clientele, Barclays expressed a somber outlook on the sales prospects of the iPhone 15 and forewarned of analogous outcomes for the forthcoming iPhone 16. The basis for this prognosis stemmed from a combination of feeble demand in developed markets and the tech giant’s struggles in the Chinese market. The brokerage firm also underscored the burgeoning risks confronting Apple’s services business, which has come under scrutiny for its App Store practices across various nations, including the United States. Despite the services segment consistently outpacing Apple’s hardware growth and contributing nearly a quarter of the company’s total revenue in recent years, lingering concerns persist.
The recent dip in Apple’s share price is anticipated to pare down its market capitalization by approximately $90 billion. This stands in stark contrast to the stock’s nearly 50% surge in 2023, culminating in a record high in mid-December, driven by a broader upswing in Big Tech stocks.
Barclays pivoted its stance on Apple from “neutral” to “underweight” while marginally reducing its 12-month price target from $161 to $160. Before today, the solitary bearish rating on Apple since July 2022 emanated from Itau BBA.
Notwithstanding this setback, the prevailing consensus among analysts maintains a “buy” rating for Apple, with an average price target of $200. Presently, the company’s shares are trading at approximately 28.7 times its 12-month forward earnings estimates, a considerable premium compared to the S&P 500’s average of 19.8.
Tim Long, an analyst at Barclays, who holds a two-star rating out of five for accuracy in Apple projections according to LSEG data, stands among the minority of analysts adopting a cautious stance on the tech giant’s stock performance.
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