Apple (NASDAQ:AAPL) shares are down 4.3% in the first trading week of 2024 after Barclays cut the tech giant's rating, citing weak demand for iPhone 15.
The stock is down a further 0.6% in pre-market Thursday after Piper Sandler analysts also lowered the rating as new checks showed a soft broader handset environment in 1H24.
“We are concerned about handset inventories entering into 1H24 and also feel that growth rates have peaked for unit sales. Handsets are ~51% of total revs,” analysts wrote in a note.
Moreover, Piper Sandler analysts flag the “deteriorating macro environment in China,” which could also weigh on the handset business.
Investors could also be distracted by “negative news around both the Watch and other ongoing legal battles.”
“Difficult comps from 2023 paired with constant currency headwinds are expected to continue in 1H24 with interest rates remaining elevated.”
Finally, analysts also flagged elevated valuation with the current NTM P/E at about 29x, which is above the 5-year historical average of 24x.
As a result, the rating was cut to Neutral with a price target of $205 per share.