RBC Capital Markets told investors the market will rise the rest of year primarily due to reflation and an improving economy.
The firm downplayed the future impact from President Donald Trump's economic agenda.
The S&P 500 is up 8 percent to 2,316 since the Nov. 8 election through Friday.
"Given the administration's pro-growth agenda — most notably around deregulation and taxes — it's understandable that investors attribute the postelection rally to President Trump," strategist Jonathan Golub wrote in a note to clients Monday. "Optimism toward a more business-friendly Washington has clearly catapulted the market forward. … We see reflation and a cyclically stronger economy as the more likely forces driving equities from here."
The firm defined reflation as the "eventual departure from the ultra-low inflation and rate environment" since the bull market began seven years ago.
The strategist reiterated his year-end S&P 500 price target of 2,500, representing 8 percent upside from Friday's close. RBC's price target ranks as the second highest on Wall Street, according to the latest CNBC's Market Strategist Survey.
