Apple shares plummeted almost 4% this Tuesday after Barclays lowered the rating of the shares of the most valuable firm in the world before the concern that demand for its devices, from the iPhone to the Mac, will remain weak in 2024.
Barclays is the second brokerage to have the equivalent of a “sell” rating about the action, which now has its highest number of bearish recommendations in at least two yearsaccording to LSEG data.
In this way, the shares of the technology giant They sank 3.6% to US$185.64 on the Nasdaq.
Apple has been dealing with a slowdown in demand since early last year and has forecast sales for the Christmas quarter below Wall Street estimates. Its performance in China has also been a cause of concern following the resurgence of local rival Huawei.
“The iPhone 15 has been mediocre and we believe the iPhone 16 should be the same,” Barclays said in a note to clients, pointing to weakness in China as well as subdued demand in developed markets.
The securities agency also warned of growing risks to Apple’s services business, which has been under scrutiny in countries such as the United States over app store practices. In recent years, this business has frequently outpaced the growth of Apple’s hardware segment and now accounts for nearly a quarter of the company’s total revenue.
Apple lost the $3 trillion mark in market capitalization
The fall in shares caused Apple’s market capitalization to pierce US$3 trillion, ending at US$2.88 trillion. The stock is up nearly 50% in 2023 and hit an all-time high in mid-December, amid a broader rally in Big Tech stocks.
Barclays lowered the value to “underweight” from “neutral” and cut its 12-month price target by $1 to $160. Before Tuesday, Itau BBA’s “sell” was the only bearish rating on Apple since July 2022.
Analysts, on average, rate the iPhone maker a “buy” with an average price target of $200. The company trades at about 28.7 times its 12-month earnings forecast, well above the benchmark S&P 500’s 19.8 times.
Barclays analyst Tim Long receives a rating of two stars out of five for its precision in estimates about Apple, according to LSEG data.
Source: Ambito
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