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Yesterday's more than 2% sell-off in stocks isn't shaking JPMorgan's conviction in where the S&P 500 will end by year-end.

JPMorgan's head of US equity strategy Dubravko Lakos-Bujas increased his year-end S&P 500 price target to 4,600 from 4,400, representing potential upside of 8% from Monday's close. Lakos now expects S&P 500 2021 EPS of $205.

Lakos remained constructive on equities, and views the latest fears of slowing economic growth "premature and overblown," according to a Tuesday note. Despite falling bond yields, the bank is sticking with its research that shows the economic recovery from the COVID-19 pandemic is still early-cycle.

Lakos isn't afraid of increased lockdown measures due to the fast spreading Delta variant, arguing that despite rising cases, deaths and hospitalizations remain low and the ongoing administration of vaccines should help combat the variant.

"Reopening of the economy is not an event but rather a process, which in our opinion is still not priced-in," Lakos explained, adding that the "S&P 500 should be supported by strong earnings growth and capital return until 2023."

Lakos believes his optimistic outlook for corporate earnings is not yet fully reflected in consensus estimates, leading to positive earnings revisions in the coming months. Lakos now expects S&P 500 2021, 2022, and 2023 EPS of $205, $230, and $250, respectively.

"This revision is largely due to global reopening which is delayed and bound to release further pent-up demand, inventory replenishment, rising profitability for energy companies, and ongoing policy actions (childcare, infrastructure etc.)," Lakos said.

JPMorgan also thinks the stock market will benefits from increased corporate share buybacks which should surpass record levels, a low interest rate environment, and a strengthening consumer.

Investors seem to agree with Lakos assessment, with stocks recovering nearly all of Monday's losses in Tuesday's trading session. The S&P 500 was up 1.5% at time of publication.

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