Apple shares were at $584.66 in midday trading Monday, up $13.16, or 2.3 percent from Friday's close. That's down 17 percent from their all-time high of $705.07, hit two months ago. At one point, they were down 28 percent.
The Citigroup analysts said that the correction is consistent with previous ones for Apple and other companies that have grown big enough to account for 4 percent of the S&P 500 index on their own. The company is now so large that sales growth is bound to slow, they said, and the iPhone faces threats from cheaper smartphones. Tablets are a big growth area, they noted, but the iPad is far less profitable for Apple than the iPhone.
They set a cautious price target of $675, which is $93 below the average of analysts polled by FactSet (NYSE:FDS), "reflecting our perception that risks for Apple are increasingly coming into focus."
Unusually, Citigroup assigned three established analysts to cover Apple together. The team will be led by chip analyst Glen Yeung, helped by Walter Pritchard, who specializes in software, and Jim Suva, from the hardware side.
"This reflects Apple's broad impact to the technology supply chain and allows us to uniquely follow the company from several industry angles," Citigroup said.
Richard Gardner covered Apple for Citigroup until he left in May.