Weak iPhone Sales Take a Bite Out of Apple Stock

On the first business day of the new year, Apple was off to a rough start. Shares of the tech giant slid over 4% to $184.51 during intraday trading Tuesday after Barclays analysts downgraded the company over its weak iPhone sales.

In a Jan. 2 note to clients, the London-based bank downgraded the iPhone maker's shares to underweight from its previous rating of equal weight.

Barclays also cut its target price for Apple to $160 from $161. "We expect reversion after a year when most quarters were missed and the stock outperformed," the Barclays note said.

Apple shares gained 48% in 2023, despite soft sales. Total net sales for the company fell nearly 3% to $383 billion in the 12 months through Sept. 30, its fiscal year, compared with $394 billion in the same period the year prior.

Barclay's analysts said in their note that poor sales of the iPhone 15, particularly in China, don't bode well for the launch of the iPhone 16. Apple's total sales in China were down more than 2% year-over-year in its 2023 fiscal year.

"We see no features or upgrades that are likely to make the iPhone 16 more compelling," the analysts wrote.

In addition, Barclays predicts that Mac and iPad sales will return to lower pre-Covid levels in alignment with the rest of the industry. Revenue for the two devices reached about $70 billion in fiscal year 2022, up from around $45 billion in the five years before Covid, according to the note.