Apple Inc. (NASDAQ:AAPL), a company known for its expectation defying growth in the last decade, may have reached a peak. That appears to be the opinion of Citigroup Inc. (NYSE:C) analysts who re-initiated coverage on the company with a new report yesterday.

Apple Stock

The report puts a buy rating on the Cupertino company, with a twelve month price target of $675. That’s far enough below the firm’s recent peak of over $700 to suggest that analysts might be reassessing their exuberant opinions of the world’s largest company by market capitalization.

A great deal was made of the new report, particularly the decision of Citigroup Inc. (NYSE:C) to have three analysts to cover the company, one or software, one for hardware, and one for the semiconductor supply chain. The publicity surrounding the report does not hide the fact that its predictions are much more modest than they have been in the past.

The report does not hold bad news for Apple Inc. (NASDAQ:AAPL) investors. The twelve month price target gives an expected return of 18%. Most investors would be extremely happy if that were to come true. The real difference is the lack of predictions of exponential growth.

Apple Inc. (NASDAQ:AAPL) shares have had their ups and downs this year. The company first saw share prices above $600 last March, but those gains have failed to hold, despite the release of new product lines, the Retina MacBook Pro and the iPad Mini, and solid financial results. The company’s most recent earnings, delivered in October, were below expectations but still delivered a 27% increase in revenue over the same period last year.

The reason for the new found restraint in assigning Apple Inc. (NASDAQ:AAPL) is, according to the Citigroup Inc. (NYSE:C) report, increasing focus on the risks associated with Apple’s business. There is increased competition in the smartphone sector from lower priced handsets and competing ecosystems, while gross margin tends to be reduced as tablets become a larger part of the company’s revenue.

There are also problems associated with being the most valuable company in the world. Apple Inc. (NASDAQ:AAPL) shares are so highly priced that investors have been wondering where the ceiling is. It is an issue of being on the frontier, and wondering where exactly the edge is.

Citigroup Inc. (NYSE:C) still expects huge growth from Apple in the coming years. According to the report the firm expects earnings per share of $49, $59, and $63 in 2013, 2014 and 2015 respectively. Apple Inc. (NASDAQ:AAPL) earnings per share in 2012 came in at $44.

The recent quakes in the tech industry have added to the pressure on Apple Inc. (NASDAQ:AAPL) valuations. The entire industry has been dragged down by the crashes in stock of Facebook Inc (NASDAQ:FB), Zynga Inc (NASDAQ:ZNGA), Groupon Inc (NASDAQ:GRPN) and even Google Inc (NASDAQ:GOOG).

Is Apple Inc. (NASDAQ:AAPL) really finished as a high growth stock, or has the recent pull back been more to do with headline pressure and uncertainty due to increased competition? One thing is for certain, these pressures are causing analysts to become less effusive in their predictions.

Apple Inc. (NASDAQ:AAPL) is an incredibly strong company with a valuation ratio that does not assume very much growth. Citigroup Inc. (NYSE:C) predictions put the 2013 PE at 11.6, and the 2015 PE at 9. these are no the multiples of a company with the history of growth and innovation that Apple has evidenced.

There has not, according to the multiples, been a bubble in Apple stock. Even when the firm was trading at $705 it was in line with industry multiples. There was, however, a bubble in the predictions of analysts. Those who, last March, suggested that the stock would hit $1000 in twelve months probably have little to hope for now in terms of accuracy.

Apple Inc (NASDAQ:AAPL) has been a company full of surprises in recent times. There is no telling what product it may release next, though it is unlikely anything will emerge before Christmas. If the firm does release a substantially new product line next year, the firm’s stock may well reach the astronomical heights some firms are still predicting.

For now though, there appears to be a trend to tone down predictions about the firm’s stock price. As soon as there is any sustained rally, particularly if it reaches a new peak, possibly after its next earnings announcement, a new round of speculation inflation is sure to begin.