While the S&P 500 has dropped 7.5 percent since its 2018 high, US equity strategist Dubravko Lakos-Bujas of JPMorgan is predicting a notable comeback.

The S&P 500 (INDEXSP:.INX) is in for a double-digit percentage increase by the end of 2018, according to JPMorgan (NYSE:JPM).

Although the S&P has dropped 7.5 percent since its 2018 high in late January, the financial services firm maintains that a recent withdrawal in stocks has made for a favorable buying opportunity.

“Most of the selling seen over this period has been largely technical (trend-following strategies and option hedging in illiquid market environment), and as such represents a buying opportunity for fundamental investors,” US equity strategist Dubravko Lakos-Bujas wrote in a note obtained by CNBC.

“The market appears to be overreacting to sequential negative narratives (e.g., inflation scare, rising yields, hawkish Fed, rising deficits), we believe strong macro and fundamentals will continue to prevail,” he added in the Tuesday (March 27) statement.

Lakos-Bujas stuck by his year-end prediction of 3,000 for the S&P, which would entail a 13-percent increase from Monday’s (March 26) close. He elaborated by explaining that the index is trading at a 16 times forward price-to-earnings multiple, making it lower than its 30-year median valuation.

He also said that the market has “strong” fundamentals and made a prediction that earnings per share will grow by over 30 percent in the next two years, citing lower tax rates and strong sales growth.

“In our view, there is still room for estimates to move higher given indirect benefits of tax reform are difficult to model (i.e., the impact of dynamic scoring, rising disposable income, higher business investment),” he noted.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

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