SAN FRANCISCO (MarketWatch) — Shares of Apple Inc. slid more than 12% Thursday, having tripped a Nasdaq circuit breaker earlier as analysts rushed to cut their price targets for the once-favored company, following a lackluster earnings report.

By the closing bell, Apple AAPL, -2.95% had shed 12.4% to rest at $450.50, down more than $63 from the previous close. That put the stock back to its level from last January — effectively erasing the entire year’s gains that saw the shares run up to $700 by late September only to come crashing down in the final weeks of the year.

While the results late Wednesday came roughly in line with Wall Street’s estimates, the forecast disappointed analysts who have already been worried about slowing demand for the company’s flagship iPhone. See: Apple shares tumble on results, forecast

At least two have downgraded the stock to neutral ratings, though nearly 80% of the covering brokers still rate the shares as a buy. Most analysts still bullish on the shares are pointing to expected new products that may re-ignite interest in the company. Read: Apple's next challenge: Finding a catalyst

“We think Apple is losing the screen-size wars as demand is moving away from the iPhone’s 3.5”/4” and more toward ~5”,” wrote Peter Misek of Jefferies & Co., who cut the stock to a hold rating and slashed his price target to $500 from $800. He called the slowdown in iPhone sales “real and material.”

Several others cut back their price targets on Apple’s shares on Thursday in response to the report.

“Momentum is a powerful thing, both on the positive and negative side, and it is tough to try to call a bottom in Apple’s negative stock momentum,” wrote Toni Sacconaghi of Bernstein Research, who trimmed his target to $725 from $750.

Several analysts made more drastic cuts, though most retain their buy ratings on the stock. At least 30 analysts cut their targets on Apple following the report, with the average reduction totaling about 15%, according to data from Thomson Reuters.

Gene Munster of Piper Jaffray cut his target to $767 from $875, citing Apple’s gross-margin forecast for the March quarter that remained below the 40% level that most investors were hoping to see.

“Given new guidance, it appears highly likely that gross margins will be down sequentially in March despite coming off of a launch quarter,” Munster wrote. “The implication of a down sequential gross margin from a launch quarter fuels fears that gross margins will be structurally different than they have in the past.”

Should iPhone fans fear Google?

Before the report, the highest price target on Apple was $1,111, set by Brian White of Topeka Capital Markets. He cut his target to $888 on Thursday, citing the decline in Apple’s share price, but adding that he believes “there is quite a bit of bad news priced into the stock at current levels, while estimate resets lower the bar for the future.”

For the December quarter, Apple reported flat earnings growth on an 18% gain in revenue. IPhone shipments of 47.8 million units came in at the low end of analysts’ forecasts — though still a quarterly record for the company following the launch of the iPhone 5 in late September.

The company’s forecast was also a concern, as Apple projected a revenue range of $41 billion to $43. Analysts had been looking for revenue of $45.6 billion. The company predicted a gross margin range of 37.5%-38.5% for the March quarter.

Bill Choi of Janney Capital noted that “results and conservative guidance will fuel additional competitive concerns around iPhone,” leading him to trim his estimates and cut his price target to $610 from $745.

“While Apple shares may be under pressure over the intermediate term, we believe long-term fundamentals remain intact, and we continue to believe Apple will leverage its ecosystem and innovate on new products,” he said.

Steve Milunovich of UBS cut his price target to $600 a share from a previous $650, while maintaining his buy rating. He called the stock “oversold,” and added that the stock “needs a catalyst, which may come with new products in the June quarter.”

Learning from Apple and Netflix

Citigroup, which downgraded Apple to a neutral rating earlier this month, cut its price target to $500 from $575.

“We suspect Apple’s results will do little to assuage investors’ concerns about share and profitability,” wrote Glen Yeung of Citi in a note to clients. While he predicted that Apple would likely launch new products this year, including a lower-end iPhone, he said risks would likely remain in focus.

“With so many uncertainties, now supported by falling consensus estimates, we believe investors will continue to focus on risks in the Apple story, limiting share appreciation,” he wrote.

Sacconaghi of Bernstein kept his outperform rating on the shares, noting that “sentiment is low, valuation is compelling, and several potential catalysts exist,” adding that “at some point, the cash has to matter,” adding that Apple has about $145 per share in cash on its balance sheet.