Why Mainstay Says Apple Won't Go As High As Carl Icahn Wants

Cantor Fitzgerald analyst Brian White recently raised his price target on Apple Inc. (NASDAQ: AAPL) to $180, while activist investor and chairman of Icahn Enterprises LP (NASDAQ: IEP), Carl Icahn, famously has $203 as his price target. However, not everyone is as bullish on the company.

David Kudla, CEO and chief investment strategist at Mainstay Capital Management, was on CNBC to discuss the price target that his firm has on Apple and why one shouldn't underestimate the company.

Not As High

"We are not as high on our price target as either Brian White or Carl Icahn, but Carl Icahn has the ability to move the stock higher," Kudla said. "As long as he is there as an activist investor, he is going to keep seeking financial engineering to improve the share price through dividend, through share buybacks – specifically through share buybacks. But we look across the product line, the great sales they have had with the iPhone 6 and 6+ in China and in the U.S."

Related Link: Will The Apple Watch Come Up Short? JP Morgan Responds To Rumors

He continued, "They are returning cash to shareholders, they are topping the share price and we have Apple TV coming. Apple Pay is doing well [...] And the Apple Watch and all these things continue to build that ecosystem."

Don't Underestimate Apple

Kudla was asked if the 20 million sales figure that some are expecting for the Apple Watch is too optimistic. He replied, "If we look at what Apple has done and with it coming to technologies or products that have been around for decades and revolutionized them. The phone and what they'll probably do to TV. Apple Watch is probably if anything been underrated.

"I think we are looking at somewhere between 15 and 25 million in sales. The key here is not to underestimate what Apple has been able to do in these product categories, how they integrate hardware and software and how all of these different devices are integrated," Kudla concluded.