The Dow Jones Industrial Average could possibly soar over 21,000 next year, stock market bull Jeremy Siegel said Tuesday.
"One thing we know is that bull markets usually don't stop at fair market value. They often overshoot it," the Wharton School finance professor said. "Now, how much is certainly a matter of question, just like bear markets overshoot on the downside."
Siegel has made some of the most bullish calls on the stock market in the past year, recently estimating that the Dow would end the year between 16,000 and 17,000.
(Read more: Jeremy Siegel sticks to bullish Dow target)
On CNBC's "Halftime Report," Siegel said he estimated fair market value for the Dow to be 18,000, adding that the run-up was likely to surpass that point in 2014.
"Bull markets usually carry 10 to 20 percent beyond that," he said, referring to fair market value. "I'm not going to say that that's going to happen this year. I'm just saying it could happen."
While consensus places fair market value at a price-to-earnings ratio of around 15, Siegel noted that such a multiple includes stock-market valuations in high-interest environments.
(Read more: Dennis Gartman sees continued bull market in Japan)
Removing interest-rate environments of 8 percent or higher, Siegel calculated an 18 to 19 P/E ratio for the market.
"That's what I base my fair market value for the Dow and the S&P on," he said. "We are going to have higher interest rates, no question about that. But they're still very low on a historical basis."
Siegel said that his 2014 outlook was based on earnings growth of 5 percent, "and that very well could be quite conservative."
(Read more: Top 3 tech stocks for 2014: Gene Munster)
"I actually think we're going to get GDP growth north of 3 percent, even 4 percent is possible. And when you include the buybacks, the leverage, etc., we could have another 8 to 10 percent earnings," he said, adding that those factors could put the Dow between 18,000 and 19,000, "maybe a little bit higher."
Siegel reiterated that he was factoring in stronger growth to lead the index higher.
"Nothing is a slam-dunk, as we know, but certainly that's looking far more favorable now than it did six months ago," he said.
(Read more: Sometimes valuation doesn't matter: Dan Greenhaus)
Stocks have yet to peak, Siegel added, saying: "We still don't have the public fully in the market."