NEW YORK (AP) — Shares of Apple Inc. briefly entered "correction" territory Tuesday as enthusiasm from the launch of the iPhone 5 wanes.
A correction is generally considered a decline of 10 percent or more in a stock market index or a particular company's shares.
Apple shares went as low as $623.55 in morning trading, 12 percent below the all-time high of $705.07 on Sept. 21. The recovered in afternoon trading, up 40 cents from Tuesday's close. At $638.57, they're back to the level of mid-August, before iPhone 5 excitement started to take hold.
Sterne Agee analyst Shaw Wu said the stock retreat appeared to be a typical consolidation after a big run-up. Demand for the iPhone 5 remains strong, and supplies of needed parts are improving. The production bottleneck now lies in assembling the phones, he said.
Analyst Stuart Jeffrey at Nomura Securities took a pessimistic long-term view when initiating coverage of Apple on Tuesday. After 2014, Apple's earnings growth rate will go from today's heady rate of more than 50 percent per year to less than 10 percent, Jeffrey predicted.
He reasons that by then, nearly everyone who can afford one in the developed world will have a smartphone. In developing countries, there will still be some growth, but competition on price will make the iPhone less profitable for Apple, he wrote.
Apple doesn't offer projections beyond the current quarter.
He put a "Neutral" rating on the shares but a $710 price target. That's below the average analyst target of $791, as polled by FactSet, but well above Tuesday's stock price.
Analysts expect Apple's next product launch to be a smaller version of the iPad, to be announced within a month.
Apple is set to release results for the fiscal fourth quarter, which ended in September, on Oct. 25.
Even with the recent price decline, Apple is the world's most valuable company, by a wide margin. Its afternoon stock price gave it a capitalization of $598 billion.
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