Apple’s Stock Dips After Barclays Downgrade Based on Fading iPhone Demand
Apple's stock slid over 2.3% ahead of market open on Tuesday after Barclays analysts downgraded the stock, citing sluggish hardware sales outlook.
Editorial disclosureRead more
All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
Apple’s shares (NASDAQ: AAPL) dipped over 2.3% in premarket trading Tuesday after Barclays analysts downgraded the stock’s rating and slashed the price target to $160. The primary reason behind the bearish move was a gloomy sales outlook for iPhone and other Apple hardware.
Barclays Trims Apple Stock Amid Lackluster iPhone Sales
Analysts at Barclays, led by Tim Long, reduced their rating on Apple’s stock to Underweight and price target to $160 from $161, guiding for a 17% dip in the next 12 months. The company’s shares slipped 2.35% in premarket trading Tuesday.
The move comes on the back of consecutive quarterly declines and the stock’s overperformance in 2023, and a gloomy outlook for the recently released iPhone 15.
“We expect reversion after a year when most quarters were missed and the stock outperformed. Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.”
– analysts wrote in a Tuesday note.
In addition, Barclays predicted similarly lackluster sales for iPhone 16 – a weakness that Long believes will apply to a broader range of Apple’s hardware products. The experts stressed the specific drop in China iPhone sales in October.
Analysts also anticipate a slower growth pace for Apple’s profitable services business, partly because of regulatory scrutiny. The gross margin in the services segment is approximately double the margin Apple makes on all hardware products, but Long thinks this expansion rate is not reliable in the long run.
Join our Telegram group and never miss a breaking digital asset story.
Apple Defied the Risks in 2023. Can the Stock Do It Again This Year?
While Apple’s fundamentals hinted at headwinds throughout the last year, the company’s stock price defied those risks by maintaining an upward trend.
More concretely, the tech giant’s shares surged over 50% to a new peak in 2023, propelling its market cap beyond $3 trillion as investors remained confident that Apple will resist macro challenges. However, declining iPhone sales, regulatory headwinds in China, and the intensifying competition in that market, primarily from Huawei, could limit Apple’s stock price upside this year.
Based on Wall Street analysts who covered the stock in the past 12 months, AAPL’s average 12-month price target currently stands at $197.41, suggesting an upside of just 2.5%.
Wall Street expects very limited upside for Apple’s shares in 2024. Do you think the tech juggernaut will challenge those expectations again? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
