For long-term investors, analyst ratings can usually be safely ignored. Analysts are playing a different game from investors. If your time horizon is measured in years or decades, what a stock does in the next six months just doesn't matter.

Still, analyst opinions can sometimes be useful data points. For example, the reasoning behind an analyst upgrade or downgrade might provide some insight into a company's long-term growth prospects.

Another situation in which investors should pay attention is when an analyst issues a "sell" rating on a stock. Sell ratings are relatively rare. Even during serious recessions over the past few decades, no more than 10% of stocks in the S&P 500 have garnered a "sell" rating at any given time.

On Tuesday, Barclays analyst Timothy Long dropped his rating on Apple (AAPL 5.98%) stock from "equal-weight" to "underweight," essentially from "hold" to "sell." The reasoning behind the downgrade is worth taking in for those bullish on the near-$3 trillion technology giant.

Hardware weakness and services sluggishness

While Apple stock gained nearly 50% in 2023, the company's financial performance was less inspiring. Weak demand for PCs and smartphones made it impossible for Apple to grow revenue. For fiscal 2023, which ended Sept. 30, Apple's revenue sank 3%.

iPhone and iPad sales decreased slightly for the year, while Mac sales imploded. Revenue from Macs tumbled 27% in fiscal 2023 and was down 34% in the quarter ending Sept. 30. In that same three-month period, global PC shipments sank just 9%, according to Gartner.

Barclay's Long isn't optimistic about a better year in 2024. Long is concerned that Apple's latest iPhone 15 won't drive a meaningful sales boost and that the next iPhone refresh (expected in September) will follow suit. Long also isn't seeing a recovery in Mac, iPad, or wearables sales.

The overall PC market is expected to return to growth in the fourth quarter of 2023 and post modest growth in 2024. Apple's pricey MacBooks may not fare as well in an economy marked by tight household budgets and elevated interest rates.

Beyond Apple's hardware woes, Long has low expectations for the services business. Apple's services segment churned up $85.2 billion of revenue in fiscal 2023, up 9% from the previous year. Long expects the growth rate to remain below 10% in 2024.

Given these perceived challenges, Long cut his price target on Apple stock to $160. Shares of the technology giant closed out 2023 just above $192.

An expensive stock

Apple risks succumbing to a prolonged period of stagnation. Given how big the iPhone business already is and how little each generation of iPhone changes, it's hard to see a way for the iPhone to drive meaningful growth for Apple. The services business is the company's best growth engine, but single-digit percentage growth won't move the needle much.

Based on the average analyst estimate for fiscal 2024, Apple stock trades for roughly 28 times earnings. As Apple's malaise drags on, paying such a high multiple for essentially no growth becomes tougher to justify. Apple's Vision Pro headset launches early this year, but the $3,500 device seems unlikely to sell well in its first iteration and probably won't contribute enough revenue to matter in 2024.

Apple remains a highly profitable company that enjoys extreme customer loyalty, but the concerns from Barclay's Long are valid. With growth proving a challenge for the tech giant, 2024 may be a disappointing year for Apple investors.