Apple, the world’s most valuable company, took a tumble on Tuesday after Barclays slapped a “sell” rating on its shares. This bearish outlook, shared by one of the brokerage, raises concerns about Apple’s future performance in 2024.
Table of contents
Demand Woes Linger
Barclays predicts continued weakness for Apple’s key devices, including iPhones and Macs, throughout the year. This follows a challenging 2023 marked by a global slowdown in demand and underwhelming holiday-quarter sales forecasts.
China Concerns
The resurgence of Chinese rival Huawei adds another layer of complexity. Apple’s performance in the crucial Chinese market has faltered, contributing to Barclays’ cautious outlook.
iPhone 15 Fizzles
The brokerage anticipates lackluster performance for both the iPhone 15 and its successor, the iPhone 16. This dampens hopes for a quick turnaround in the mobile device segment.
Services Under Scrutiny
Beyond hardware, Apple’s lucrative services business also faces scrutiny. Regulatory investigations in the US and other countries over app store practices could impact future growth.
Market Reaction
The bearish sentiment sent Apple’s stock plummeting 3% on Tuesday, potentially erasing $90 billion from its market value. This comes after a strong 2023, with the stock soaring nearly 50% and reaching a record high in December.
Analysts Divided
While Barclays joins a small chorus of skeptics, the majority of analysts maintain a “buy” rating for Apple shares, with a median price target of $200. However, the company’s current valuation, at 28.7 times its forward earnings, remains significantly higher than the broader market.
Barclays Analyst’s Track Record
It’s worth noting that Barclays analyst Tim Long’s track record on Apple estimates is somewhat mixed, receiving a two-star rating for accuracy according to LSEG data.
Conclusion
Overall, while Apple faces headwinds in 2024, the company’s strong fundamentals and long-term growth potential shouldn’t be ignored. Investors should carefully weigh Barclays’ concerns alongside broader market trends and Apple’s own strategies before making any decisions
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