A year ago, analysts were imagining scenarios that would send Apple's stock to $1,000 a share. This year, they're trying to figure out how it doesn't go to zero.
On Friday, Barclays analyst Ben Reitzes lowered his price target to $465 from $535.
In the note explaining the $465 price target, he laid out a doomsday-type scenario that would lead to Apple's stock breaking down further and reaching $340 a share.
In his opinion, it's all about margins.
If Apple's gross margins crashed to 33%, down from 38.6% last quarter, he thinks the stock tanks.
The gross margins would collapse if Apple was forced to lower the price of the iPad and the iPhone to fend off competition in the market.
He also speculates that Apple could run into manufacturing problems with Foxconn, and TSMC.
Reitzes says that Apple had supply problems with the iPhone 5 because its "incell" screen technology was difficult to manufacture. He also says there were issues with the aluminum casings getting scratched. He also notes that Apple couldn't supply iPad Minis or iMacs initially.
He says, "The rather pervasive level of these constraints seems increasingly supportive of the view that Apple is struggling to properly execute of late."
If Apple's next wave of products suffers from production issues, it will hit the company's margins.
He also says Apple plans "to fully transition away from Samsung to TSMC for application processors." This could lead to complications if TSMC can't meet Apple's needs. If Apple can't sell products to users, then he thinks users could opt for a rival platform.
One other risk for Apple — losing executives. Right now, the executive team is fairly solid and has guided Apple through its glory years. If Apple were to lose those people it would be a negative for the stock.
This is, again, the worst case scenario.
Reitzes thinks Apple's margins actually go to 36%. He thinks Apple mixes in lower cost iPads and iPhones which hit the margin. He thinks growth slows down and the stock goes to $465.
We don't have a price target on Apple's stock, but we did lay out our bull case for Apple this week here ...
SEE ALSO: Why Apple Isn't Actually Doomed
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