The stock market isn't being ascribed the correct valuation, ConvergEx Group Chief Market Strategist Nicholas Colas said Tuesday.
"We all hear $110 a share, and that seems like a very comfortable target, multiplied by 15, 16, 17, hit a price target, that's cool," he said. "However, what was that number 18 months ago? It was $118. What was it a year ago? It was $115. What was it the beginning of the year? It was $112.
"So, the answer is not $110. We know it's going to be $108, maybe $107. And I'm pretty uncomfortable paying 16, 17 times earnings for numbers that are coming down. I want to pay for numbers that are going up. That's not happening here."
On CNBC's "Fast Money," Colas said that stocks might be overextended.
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"Earnings are coming in, and P/E is going to expand to a point, but not much further," he added. "I think we're near that inflection point."