(Reuters) – Apple fell sharply on Tuesday in early trading on Wall Street, as Barclays lowered its recommendation on the world’s most valuable company, saying it feared that demand for its devices, ranging from the iPhone to the Mac, would remain weak in 2024.

Barclays, which went from “neutral” to “underweight” on Apple with a price target of $160, is the second intermediary to be “bearish” on the Apple group after Itau BBA, which opted in July 2022 to “sell” on the title.

On Wall Street, around 3:20 p.m. GMT, Apple shares fell 3.14% to $186.47 compared to a decline of 0.05% for the Dow Jones index, 0.65% for the Standard & Poor’s 500 and 1.58% for the Nasdaq Composite.

Apple stock jumped nearly 50% in 2023 and reached a record high in mid-December amid a general recovery in the values ​​of large technology companies.

Apple stock trades at about 28.7 times 12-month expected earnings, a higher ratio than the S&P 500 index, which has a P/E of 19.8 times.

Apple has faced a slowdown in demand since early last year and forecast sales for the quarter including the holiday season below Wall Street expectations. The group’s results in China are also considered worrying compared to its local competitor Huawei.

“The iPhone 15 was lackluster and we think the iPhone 16 should be lackluster as well,” Barclays wrote in a note to clients, highlighting weak Chinese demand and subdued demand in developed markets.

Barclays also sees a growing threat to Apple’s services business, notably its applications store, which is being targeted by regulators in certain countries, including the United States, due to alleged anti-competitive practices.

The services activity, which now represents almost a quarter of the group’s total turnover, has, in recent years, often performed better than that of the “hardware” segment.

(Writing by Aditya Soni and Medha Singh in Bangalore; Claude Chendjou, edited by Kate Entringer)

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