Although market multiples are edging down, investors should expect the S&P 500 to go as high as 1,900 over the next 15 months, a top strategist told CNBC on Thursday.
"You can look at so many different valuation metrics," John Lynch, CIO at Wells Fargo Private Bank, said in a "Squawk Box" interview. "If you look at [P/E ratios between] 16.5 - 16.7 ... it can get to 1,850-1,900 relatively easily with a more conservative valuation than what consensus estimates are projecting." Lynch said his projection was for year-end 2014.
"I still think upside over the next 12-15 months, we've got about 10-12 percent but what we've seen in the last few days is that there is some trepidation," he said. "I would encourage all investors to really focus on valuation or P/E's relative to earnings and interest rates."
However, the market is "just starting to reassess" right now, he said, with uncertainty over the looming debt ceiling debate and the 2014 federal government budget.
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John Tanious, global market strategist at JP Morgan, said that although the market is set for a move higher, investors need to take a closer look at valuation. "It should be pretty clear to everybody that we're kind of hovering in line with our 10-year average," he said. "You have to look at a 15-year average to make the argument that stocks are cheap from a P/E ratio standpoint."
"I would argue, directionally, that markets continue to move higher," he added, noting that the U.S. consumer appears to be improving better relative to overseas markets, and this offers opportunities for investors to be selective in their capital allocation in the country.
"Things are clearly improving, but they're not fantastic," he added.