Barclays reconfirmed its Underweight rating on Apple (NASDAQ:AAPL) ahead of the company’s earnings announcement.

On Monday, the stock experienced a 1% decline as the bank characterized the latest iPhone as “underwhelming,” and predicted a similar response to the next iteration.

For the December quarter, the tech company is projected to release results on par with analyst forecasts. However, guidance for the ensuing quarter is anticipated to fall short of estimates due to waning hardware demand, continuing a trend spanning multiple quarters for AAPL.

Apple is slated to unveil its quarterly earnings on February 1, with an anticipated earnings per share of $2.10 and sales amounting to $118.26B.

Barclays deemed the sell-side consensus estimates for hardware in the current quarter to be overly optimistic, with its latest checks indicating a considerable year-over-year decline in iPhone 15 sell-through in China. The analysts, Tim Long and George Wang, noted that the sale of more base models has led to a negative mix shift and margin challenges.

While Apple may tout initial orders for the Vision Pro, analysts expressed skepticism regarding its impact on financial results for at least the next year. They added, “Other hardware categories are expected to remain lackluster, and we anticipate Services will not grow by more than 10%. We anticipate a reversion following a year of underperformance in most quarters, despite the stock’s overall improvement.”

The overall consumer spending environment is currently subdued, and this is likely to exert pressure on estimates and valuation ratios moving forward, the team suggested. Notably, the stock surged by more than 50% in 2023.

Barclays projected iPhone sales for the March quarter to range from 52M compared to the Street’s estimate of 54-55M, attributing this to a lengthening of replacement cycles and historically low upgrade rates in the U.S.

The company currently holds 19 Buy ratings, seven Buys, 14 Holds, three Sells, and one Strong Sell among Wall Street analysts.