Lucas Jackson/Reuters

Bank of America lowered its S&P 500 year-end target to 2,600 from 3,100 amid the coronavirus pandemic.

"Our economists now forecast the deepest recession in the post-war era, and health care experts have extended the timeline for social distancing," equity and quant strategist Savita Subramanian wrote in a Thursday report.

The bank also lowered its 2020 earnings-per-share forecast to $115 from $138. The 2020 forecast implies a 29% slump, worse than the average earnings drop during the great recession, which was about 20%.

Read more on Business Insider.

Bank of America has lowered its year-end target for the S&P 500 to the lowest on Wall Street amid the coronavirus pandemic.

The bank's 2020 S&P 500 target is now 2,600, a 16% cut from the previous estimate of 3,100, according to a Thursday report from equity and quant strategist Savita Subramanian.

"Our economists now forecast the deepest recession in the post-war era, and health care experts have extended the timeline for social distancing," Subramanian wrote. "We incorporate these elements, as well as what the world might look like post-COVID 19 into our market outlook."

The report comes amid a major market rout spurred by the coronavirus pandemic. US stocks sold off sharply after reaching all-time highs in February, swiftly falling more than 20% into a bear market and ending a record expansion.

Now, stocks remain volatile as investor sentiment is weighed down by seemingly continuous bad news about the coronavirus outbreak.

Read more: The stock-investing chief at $485 billion Schwab offers 4 crucial tips for weathering the coronavirus storm — and outlines how to keep making money

The economy has been hit hard, sparking mass layoffs and putting companies in distress. Against this backdrop, the bank also lowered its 2020 earnings-per-share forecast to $115 from $138. The 2020 forecast implies a 29% slump, worse than the average earnings drop during the great recession, which was about 20%.

"It could take multiple years to recover lost corporate earnings: during the Financial Crisis, it took four years to get back to peak earnings; during the Great Depression it took over a decade," she said.

Subramanian also expects that companies will throw "all ills into 2020 results with an obvious scapegoat, setting a clean slate for 2021."

In 2021, earnings per share could pick up to between $145 and $155 in 2021, according to the report. The bank expects it will take multiple years to recover to 2019's earnings peak, using the great financial crisis and the Great Depression as examples.

Read more: Buy these 14 stocks flush with the cash reserves to survive a prolonged coronavirus crisis, BTIG says

"The fast and aggressive policy response, and the improved quality of the S&P 500 (the last five years' EPS volatility is one-third of the average cycle's going back to the 30s) also point to a more resilient recovery," Subramanian wrote.

Investors should keep in mind that the policy response and actions of the Federal Reserve are positives for stocks, according to the note. "Panic selling is a recipe for losing money: the best days typically follow the worst days," she said.

"Since the 1930s, if an investor sat out the 10 best days per decade, the returns would be just 91% vs. 14,962%," Subramanian wrote.

Read more: A new survey of 159 pro investors shows experts are looking to buy stocks again. Here's what 9 of them had to say about where they're putting money to work.

NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption