Apple started the new year on a sour note Tuesday after analysts at Barclays cut the company’s stock rating over concerns about softening sales demand for its flagship iPhone.
The analysts cited recent sales checks that showed weaker demand in China, as well as developed markets. Barclays downgraded its rating for Apple to “underweight.”
Barclays also cut its price target for Apple to $160, down from its previous target of $161. Apple’s stock fell about 3% to 186.38 in premarket trading after the downgrade.
“We expect reversion after a year when most quarters were missed and the stock outperformed,” Barclays analysts said in the note, according to Bloomberg.
“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,” the analysts added.
The dim projection came on the heels of what was a banner year for Apple – one of the so-called “Magnificent Seven” tech stocks alongside Alphabet, Amazon, Meta, Microsoft, Nvidia, and Tesla. Those firms helped drive a major “Santa Claus” rally on Wall Street to close out 2023.
Apple’s stock rose by 48% in 2023, leading to a broad overall recovery among major tech firms. The company briefly became the first in history to achieve a $3 trillion valuation.
In the coming year, Barclays projects continued growth for Apple in emerging markets – but not enough to offset weakness in its primary markets.
The analysts also projected a slowdown in Apple’s services segment, which includes features such as the Apple TV+ and Apple Music streaming platforms, according to Barrons.
A regulatory flap over the Apple Watch is set to be another long-term headache for the tech giant. The company was briefly barred from selling the latest version of its Apple Watch after a trade agency ruled it had infringed on a rival firm’s patent for tracking blood oxygen levels.
However, Apple won a temporary reprieve last week after a US appeals court paused the ban. The company had argued it would suffer “irreparable harm” if the ban remained in place.
This story originally appeared on NYPost
