Citi Raises Its 2014 Target And Unveils Its 2015 Target For The S&P 500

"Large cap US equities are approaching year-end targets more rapidly than had been anticipated, supported by respectable earnings," wrote Levkovich. "With the S&P 500 up 4.4% year-to-date and our late 2013 expectation for a 2014 full-year gain of about 7.0%, it seems appropriate to reconsider the market outlook especially in the face of better-than-expected profits."

The S&P is at around 1,935 right now.

Here's Levkovich's expectations for S&P 500 earnings:

• 2014 EPS: $118.20 (up from $117.75)
• 2015 EPS: $126.70 (up from $126.00)

He sees the index rallying to the "2,040-2,060 range (or a single point figure of 2,050)" twelve months from now.

"The bigger challenges facing investors in 2015 might involve a significant change from the Fed and Chinese economic trends," he said. "It is reasonable to wonder about a forthcoming tightening in monetary policy once tapering is done with and the focus shifts to rate hikes. The timing and intensity of such moves will be somewhat dependent on inflation pressures and there is also concern about the impact of any rate hikes on emerging economies."

Levkovich does not expect this to be a smooth ride up. According to the Panic/Euphoria model, Citi's proprietary measure of market sentiment, there's an 80% chance the market will be down during this period.