Barclays thinks investors need to step away from one of last year’s winners as 2024 kicks off: Apple . The bank lowered its rating on the tech giant to underweight from equal weight. It also trimmed its price target on the stock to $160 from $161. The new forecast implies downside of about 17% over the next 12 months. Analyst Tim Long cited weakness in iPhone sales volumes as well as in Macs, iPads and wearable devices for the downgrade. Apple shares were down 1.7% in premarket trading following the call. The company is the most valuable in the world with a market cap of nearly $3 trillion. “[iPhone 15] has been lackluster and we believe IP16 should be the same,” Long wrote in a Tuesday note. “Other hardware categories should remain weak, and we don’t see services growing more than 10%. We expect reversion after a year when most quarters were missed and the stock outperformed.” Ongoing weak results coupled with multiple expansion isn’t “sustainable,” Long said, adding that next year will be more risky for Apple’s services business, which includes Apple Pay. Apple’s fiscal fourth-quarter results had surpassed analyst expectations for sales and earnings per share but indicated a decline in overall sales for the fourth quarter in a row. Apple is one of the so-called Magnificent Seven that made up the bulk of last year’s strong gains for the S & P 500. The other members of the group are Nvidia, Meta Platforms, Alphabet, Tesla, Amazon and Microsoft. All seven names rallied last year, with Nvidia tripling and Meta soaring nearly 200%. Tesla doubled, while Amazon and Alphabet were up 80% and 58%, respectively. Microsoft gained 56.8%. AAPL .SPX 1Y mountain AAPL and SPX in past year Apple surged 48.2% in 2023, its biggest annual gain since 2020. If the stock, another Magnificent Seven member falters, it could put pressure on the S & P 500, which soared 24% in 2023.
This story originally appeared on CNBC
