Deutsche Bank strategist Binky Chadha predicted a double-digit return in U.S. stocks this year because of an expected surge in earnings and economic growth, while downplaying the impact of President Donald Trump's tax reform proposals.
The strategist's year-end price target for the S&P 500 is 2,600, representing 13 percent upside from Thursday's close. The firm's price target ranks as the highest on Wall Street, according to CNBC's latest Market Strategist Survey.
"The post election 'Trump rally' has not reflected expectations of policy changes or stimulus. It in fact followed the typical trajectory around close presidential elections, pricing out the uncertainty risk premium rather than pricing in policy changes or stimulus," Chadha wrote in a note to clients Thursday. "The case for US equities is strong: a V-shaped recovery in GDP and earnings growth, unfolding for a year now has further to go; equities are not expensive on an absolute basis; on a relative basis they look very cheap."