Apple faces second downgrade this week as iPhone performance concerns intensify: Report

Apple Inc., already positioned as the least-favored among major tech stocks on Wall Street, faces heightened concerns about iPhone sales that have prompted a second downgrade this week, solidifying analysts' prudent stance, according to a report by Bloomberg.

Harsh Kumar of Piper Sandler & Co. lowered his rating on Apple on Thursday, pointing to a weakened macro environment in China that is expected to dampen iPhone demand. This downgrade follows a more bearish move by Barclays Plc earlier in the week, where analysts led by Tim Long shifted their rating to underweight.

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“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,” Kumar was quoted as saying by Bloomberg.

As 2024 commenced, Apple already had the fewest bullish recommendations among big tech stocks, according to Bloomberg data. Piper Sandler's downgrade further diminishes the company's buy-equivalent ratio, bringing the percentage of analysts optimistic about the company to a three-year low.

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Apple, the lone big tech firm to experience revenue contraction over the past four quarters, is currently anticipated to achieve only 3.6% revenue growth and 7.9% profit expansion in fiscal 2024, according to the average of analyst estimates compiled by Bloomberg.

After rallying nearly 50% the previous year, Apple's stock has stumbled in the initial sessions of 2024, declining 4.3% and erasing nearly $130 billion in market value, according to Bloomberg data. The shares are now approaching oversold territory, poised to extend losses for a fourth consecutive session.

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Despite Wall Street's nearly unanimous bullish sentiment toward big tech, Apple remains an exception, garnering only 33 buy-equivalent recommendations. This pales in comparison to Amazon.com Inc.'s 68, Meta Platforms Inc.'s 66, and the 59 bullish ratings for Nvidia Corp.