Apple Faces Double Downgrade Over iPhone Sales Concerns

Apple is grappling with its second stock downgrade in a week, reflecting a cautious outlook from analysts towards the Cupertino tech giant, FinancialPost is reporting.

Piper Sandler & Co.’s Harsh Kumar made the latest move on January 4, revising Apple’s rating downwards due to concerns over a weakened macro environment in China, possibly leading to a decline in iPhone demand.

Kumar, in a note, expressed unease about the levels of handset inventories, altering Apple’s recommendation to neutral from overweight after holding an optimistic view since March 2020. He pointed out a perceived plateau in unit sales growth rates as a primary concern.

This action by Kumar follows a similar, more bearish move initiated by Barclays PLC on January 2, wherein analysts, led by Tim Long, downgraded their rating to underweight.

Starting off 2024, Apple already held the record for having the fewest bullish recommendations among major tech stocks, as per Bloomberg’s compiled data. Piper Sandler’s adjustment further diminishes the proportion of positive outlooks, reaching a three-year low in analysts’ confidence towards the company.

Apple continues to face the unique situation of being the sole big tech company witnessing revenue contractions for four consecutive quarters. Analyst estimates gathered by Bloomberg foresee a modest 3.6% revenue growth and 7.9% profit expansion in fiscal 2024.

Despite boasting a remarkable 50% rally in the previous year, Apple’s stock faced a rough start in 2024, recording a 4.3% decline.

This descent wiped off nearly US$130 billion in market value, raising concerns as the shares approach the oversold territory, extending losses for a fourth consecutive session.