Bond guru Gundlach slaps $425 price target on Apple Inc. stock

“I’m getting the feeling lately that Apple is now approaching the bottom of its recent correction,” Marc Vigod writes for The Motley Fool. “Apple has gone through similar corrections in the past, only to prove time and time again that these were buying opportunities. It seems you can’t go more than an hour now on CNBC without hearing some sort of Apple bashing. Everyone is an expert on Apple these days, including bond guru Jeffrey Gundlach. The other day on CNBC he slapped a $425 price target on Apple. Can anyone now be an expert on Apple stock?”

“Now, I’m not sure about you but I usually don’t take my tech stock investing tips from bond gurus. I’ve been in the tech industry for over 15 years now and follow the sector closely, so maybe I feel better equipped to gauge Apple’s prospects than a bond guru,” Vigod writes. “Gundlach argues that because Apple shares have gone up rapidly they must retrace back to their starting point of $425. Interesting logic, right? I must add that Gundlach is talking his own book; he has disclosed he is short Apple shares [bold emphasis added – MDN Ed.]. I’d expect nothing less from a bond guru opining about tech stocks.”

Vigod writes, “Apple sits on the largest cash warchest of any company in the world. If Gundlach’s price target is achieved, that would mean Apple would be trading for $300, if you back out the net cash on the balance sheet. With over $50 in earnings per share for 2013, that is a P/E of 6.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “David E.” for the heads up.]


  1. I saw him on CNBC. While I don’t subscribe to all of the conspiracy theorists out there, this guy is absofuckinglutely trying to drive down the stock price. And he probably succeeded a little bit. But he is just one of many analysts covering AAPL. Some are right some are wrong. But only time makes that true. Just because it makes you unhappy doesn’t mean that an analyst is wrong. Actually, most analysts have missed this huge drop in AAPL. There were a few who have said for quite a while that it was just overpriced and had run up too high much too fast. I guess they were correct. But most analysts still have a long-term price on AAPL higher than it is today. Although quite a few have adjusted that down a touch. I’m no analyst but I too believe that AAPL will be considerably higher within the next six months. Just be careful, because it won’t run like it did in the past. This time learn to take profit occasionally when you know you should. As this $170 drop has demonstrated, buy-and-hold forever is just plain silly. But this guy, he’s a real dick. Just one look at him and you know he’s playing games. Be careful out there. It’s your money. And remember, you’re investing to make money not to brag about holding an equity forever. Good luck.

    1. “As this $170 drop has demonstrated, buy-and-hold forever is just plain silly.”

      Really? 4000% profit over the last 10 years says otherwise. It’s the traders who are pulling their hair out and jumping out windows. Apple’s at $547? So what? The fundamentals haven’t changed and I don’t have to sell or pay a margin call. The most expensive share of Apple I own was bought at $387.

      1. Why would traders be jumping out of windows? Most intelligent traders (and investors ) take profit when they’re way ahead. And if you’re talking about daytraders, they have had puts in place and have made money as Apple went down and will make money with calls as Apple goes back up! I’m neither a trader nor a daytrader. I do use calls and puts carefully as it’s a much more economical way of investing in AAPL. And the profit can be much greater for the same amount of money invested compared to stock. $500, $600 $700 for a share of any company limits your horizon. I think the last shares that I purchased were around $350 per share. Like you Zeke, I am an investor. I’ve been invested in AAPL for years. But at certain points along the way I have learned to take profit and then wait patiently for a better entry point. That is certainly not daytrading. That’s just learning to not be greedy. Or foolish. Apple is $158 from its all-time high. I cashed out at the top. I can now make all that money again. You don’t see me jumping out of any windows. I’d consider it if I hadn’t taken profit six weeks ago. Why do you think the stock started dropping at that point? People were taking profit. It wasn’t some conspiracy or manipulation, people were simply taking profit. It’s not evil it’s just common sense. It’s why you invest, to make a profit. I don’t invest in AAPL or other companies to brag about holding it forever. I don’t get that. But I guess the people that I see claiming that they have held AAPL forever don’t have much choice when it drops precipitously like it has. Opportunity missed. Might as well act as though it was the right thing to do. And even Apple will not go up forever as demonstrated by September 24, 2012. I took profit September 21, 2012. As did many people. They weren’t deserting Apple. They aren’t evil. They’re investors. But if holding a stock forever makes you happy I’m glad for you. But most of us were taught early in life to take profit and not be greedy lest we may end up with nothing. Or at least a lot less then we started with. As far as I know, there are no guarantees in life. No stock, no matter which stock it is, goes up forever. They all at least take a break occasionally and some take a break forever. It happens to the best of them. Good luck in your investing.

        1. I am a member of an investing community dominated by day traders and options traders. People who try to time the market and play the rumors have been largely sucker punched by the market over the last 2 months. Many holding options have seen their money simply disappear. People buying on margin have experienced calls that were devastating, forcing them to sell at very low prices.

          Those of us who simply buy when we have the money and sell when we need the cash for something without much regard to trying to time the market can simply avoid selling right now, and buy as much as we can afford. I take out as much cash as I can tax-wise every year, and my portfolio still grows.

  2. So buying and holding “forever” is just plain silly, GM? Wow. Glad I didn’t listen to that kind of advice in 2008-2009 when AAPL dropped (are you ready for this, Newbies?) almost 55% in value from the 200’s to the low 80’s in the financial crisis. Yes, it happened, and not too long ago.

    The very same words as those you’ve uttered above were proffered then to one and all, to the point that a very good friend sold ALL of his AAPL holdings (purchased @188 on average) into the “disaster relief” price of $82 per share. He lost seven figures then . . . and no longer listens to anyone who espouses such simplistic advice as this.

    At 65 years of age, I have lived through more market pullbacks, tech stock meltdowns, and “astute” financial advocacy than most, but having weathered every one of them, I now hold a crapload of AAPL @ 12.41 per share, and I guarantee you it will be worth 700 or more before I sell.

    Sure, I’ve lost a ton on paper in the past couple of months, but was 2008-09 any less terrifying and ominous than this 25% correction? Hell no, and look what has happened in the intervening 4 years. Does “buying and holding” since then (and reaping a share gain of almost 600%) qualify as a sound practice?

    Look, I don’t know how long “forever” is with this equity, but it certainly has not arrived yet. One thing I’ve learned over the years: Market timers, day traders, Wall Street insiders, and most financial analysts are like Las Vegas gamblers who (supposedly) win a boatload every time they visit the city. None of them has ever lost a hand or left money on the table–that is, if you listen to them. But Vegas was not built on the backs of winners, and neither was a solid, well-funded portfolio created by investors who run for the door every time things get rough.

    Sometimes, holding one’s ground is the best way to win the battle, not sounding retreat at every perceived setback. Such a practice is NOT easy, to be sure. Advice to flee and run for the hills is legion, but no one (NO ONE) ever got rich buying high and selling low. When financial blood is flowing in the streets, it takes genuine courage to invest and hold, if not “forever,” at least for an extended period of time. Such personal fortitude is rare, but it is the stuff fortunes are made on.

    But then again, I could be wrong.

    1. I too am 65, recently retired, and holding a lot of AAPL. I agree with everything you’ve said. I held through 2008-2009 as well. My least expensive Apple share is $7.49 (split adjusted) and my most expensive is $387. One investor board where I hang out, dominated by options traders, is sounding suicidal the last few days. Buy and hold is gut wrenching at times, and you have to take a little off the table now and then, but except for a few very lucky souls, the strategy pays better than trading where Apple is concerned.

    2. Sure I agree with your view on daytrading also. I’m uncertain what you’re talking about running for the hills? Running for the doors? My point is pretty simple. Certainly shouldn’t have been misconstrued. My point is this, when you’re way ahead take profit. That means when you’re way up not way down. Which I stated very clearly. As for Vegas and fighting battles? Genuine courage and personal fortitude? You lost me there. I don’t go to Vegas but since you brought it up, I believe that anyone who does play cards would tell you that at some point you have to take your money and leave or you may end up with less or nothing. Right? Your analogy not mine. There comes a time when you invest when you realize you’re way, way up in a stock and it’s in nose bleed territory. When a stock like AAPL is at its all-time high and you don’t take profit? C’mon, that’s just investing 101. Take some off the table. Put it back in at a little better entry point. It doesn’t happen that often but occasionally you have to take some profit. I guess if I had not taken profit at the top I would probably say I was a buy-and-hold investor too. What else could I say? But I’m happy for you if you’re happy. But yes, you could be wrong.

  3. GM,

    Hindsight is 20/20. Sure, if many of us knew for sure that 705 would bethe recent AAPL high, we’d have taken some profits. How does one know for sure? Last year I sold some shares at 405 that I’d held for 6 years. 405 was near AAPL’s high at that time. Two months later, the stock hit 600+! My point is, since the company’s fundamentals are intact, sales of products old and new will be robust in the upcoming quarter, and no meaningful competition for most AAPL products is on the horizon, the stock will rebound. Now, when will it hit its next “high” plateau? No one knows!

  4. Holding aapl stock works well over the long term. Of course all gains are only hypothetical until you sell.
    If you have cash to play with then by all means try and buy low and sell high. However you could end up missing a huge rise since the market is so unpredictable and controlled by those with ulterior gains.
    Like many here I am long on aapl. Earlier I tried to play the market with aapl stock but sold expecting the usual sell off at earnings time only for the stock to jump up 3 fold. I decided then to go all in for the long term and the gains have so far exceeded the average market.

  5. If Apple stock hits $425 how would the other stocks be? And the economy? One thing that might matter is that more and more Apple’s profits are coming from China, where they will built more than 10 Apple stores in the province capital cities within couple of years. That money stays in China.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.