The Apple Logo is Pictured at a Retail Store in the Marina Neighborhood in San Francisco
The Apple logo is pictured at a retail store in the Marina neighborhood in San Francisco, California April 23, 2014. REUTERS

A German investment firm has predicted Apple Inc’s downfall as it sets a stock price target of $60 per share. Berenberg Bank believes the financial model of the Cupertino-based company relies too much on the iPhone.

Berenberg has forecasted a more than 50 percent decline of Apple shares. According to Apple Insider, the German firm’s price target is so “extreme” that it doesn’t appear to be plausible prediction but more of a statement.

In a note to investors, Berenberg issued the extremely bearish forecast on Apple stock. Even a few investment firms who remain bearish on Apple have maintained price targets of above $100. As of the morning of Feb. 26, Apple stock was trading at $128 per share.

Berenberg analyst Adnaan Ahmad noted that 70 percent of Apple’s revenues and 85 percent of operating profit come from iPhone sales. He said the “law of large numbers” might soon catch up with Apple. He believes that as the accelerated replacement cycle slows down, iPhone volumes will move towards negative in terms of growth.

The analyst doesn’t think much of the company’s new Apple Watch but he remains optimistic on Apple building a car in the future. Ahmad said Apple should acquire electric car manufacturer Tesla to give the company a start in the automobile industry.

Meanwhile, Apple has recorded gains in February as overall U.S. stocks climbed to records on Feb. 25. Apple stock has remained a favourite among hedge funds. Goldman Sachs said Apple is poised to have a major effect on money managers in 2015 as it comprises the highest percentage of hedge fund equity assets in over two years, reports Forbes.

The firm noted that Apple is still the undisputed most popular hedge fund stock. The company continues to be a “key driver” of hedge fund performance and U.S. equity returns and growth. According to Bloomberg who surveyed 44 analysts, Apple is expected to increase by about 2 percent in the next 12 months. Goldman Sachs has issued a more bullish stock price target of $145 per share.

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