Apple hit with second downgrade this week as iPhone sales worries grow

financialpost.com:

Apple Inc. was already the least-loved big tech stock on Wall Street. Growing concerns over iPhone sales have now triggered a second downgrade this week, cementing analysts’ cautious approach.

Piper Sandler & Co.’s Harsh Kumar cut his Apple rating on Jan. 4, citing a weak macro environment in China that will dampen demand for iPhones.

“We are concerned about handset inventories,” Kumar said in a note, lowering his recommendation for Apple to neutral from overweight after holding a bullish view since March 2020. “Growth rates have peaked for unit sales,” he said.

Kumar’s downgrade follows a more bearish move by peers at Barclays PLC where analysts led by Tim Long cut their rating to underweight on Jan. 2.

Coming into 2024, Apple was already the big tech stock with the least number of bullish recommendations, according to data compiled by Bloomberg. Piper Sandler’s downgrade now pushes the company’s buy-equivalent ratio down even further — with the percentage of analysts bullish on the company at a three-year low.

Apple was the only big tech firm to see revenues contract for the past four quarters. Wall Street is currently anticipating revenue growth of just 3.6 per cent in fiscal 2024 and profit expansion of 7.9 per cent, according to the average of analyst estimates compiled by Bloomberg.

The stock, which had rallied nearly 50 per cent last year, has stumbled in the first sessions of 2024. It has slid 4.3 per cent this year, wiping off nearly US$130 billion in market value, according to data compiled by Bloomberg. The shares are now on the brink of breaching into the oversold territory as they’re set to extend losses for a fourth consecutive session.

Nearly unanimously bullish on big tech, Wall Street is more cautious