Apple shares have dropped around 20% since their recent peak in September, but analysts at Citigroup believe the worst could now be over.
A combination of factors have led to Apple's decline - the US election, worries about America's fiscal cliff, Europe's financial problems, a slowdown in China, as well as concerns about the company's own growth prospects amid increased competition. Citi said:
We assert that Apple's share of the smartphone market is at risk from low-end smartphones and competition from other eco-systems. We see upside from tablets, but this negatively impacts gross margin.
Even so, Citi has begun coverage of Apple with a buy recommendation and $675 a share price target. The bank said
We believe Apple shares have already achieved trough, setting them up for near-term appreciation. We note that based on history, after such sell-offs, Apple shares typically increase 20%-50%.
Apple is currentlyhh nearly 1% higher at $576, even as Wall Street opens lower, with the Dow Jones Industrial Average down 0.5%.
