Topline
Another firm cut their rating for Apple stock Thursday, sending shares of the iPhone maker down yet again as Apple’s chilly start to 2024 marches ahead.
The iPhone 15 is pictured. Sales for Apple’s smartphone are not driving the same growth for the … [+] company they used to.
Key Facts
Piper Sandler analysts led by Harsh Kumar cut their grade for Apple stock from overweight to neutral, suggesting they no longer expect Apple stock to outperform its peers.
Kumar struck a similar tone to that of Tuesday’s downgrade by Barclays, which cut its rating for Apple from neutral to underweight, though Kumar’s $205 price target is far more optimistic than the Barclays group’s $160 target.
Still, Apple shares slipped more than 1% to about $182 in Thursday morning trading following the Piper Sandler report, tracking toward their fourth consecutive day of losses and bringing their loss this week to about 5%, which would be its worst week since the first week of September.
The Piper Sandler downgrade came as part of a broader note to clients previewing the year ahead for about two dozen tech companies in the semiconductor chip industry, cautioning that the sector’s strong market performance during 2023, driven largely by interest rate optimism and macroeconomic conditions instead of earnings expansion, leaves little room for growth.
For Apple specifically, Kumar cited concerns about growth in iPhone sales, which account for about 52% of Apple’s total revenue, weak demand in Apple’s crucial China market amid the country’s economic slowdown and a share price to earnings valuation ratio well above Apple’s historic level.
Big Number
$162 billion. That’s how much market capitalization Apple has lost so far in 2024. The firm’s $2.8 trillion valuation still makes it the world’s most valuable public company.
Key Background
Apple has the lowest proportion of analyst buy ratings of any tech stock, according to Bloomberg, and Apple’s percentage of buy ratings sits at a three-month low. Barclays analyst Tim Long’s argument against Apple similarly focused on “lackluster” iPhone demand and the need for a “breather” after Apple stock’s massive 2023 rally despite a decline in annual revenue and profit. Apple’s 4% plunge Tuesday sent the Nasdaq Composite stock index to its worst day in more than two months. Apple’s 5% share price decline year-to-date is worse than the S&P 500’s 1% slip.
Further Viewing
Further Reading
