A strategist with the highest S&P 500 target on Wall Street told CNBC on Tuesday that he sees an 18 percent return this year due in part to the new Republican tax law.

Keith Parker, head of U.S. equity strategy at UBS, projects the S&P 500 will end the year at 3,150.

So far this year, as of Monday's close, the index was up about 6 percent.

Economic growth was better than expected in the fourth quarter of 2017 and the tax bill passed earlier than expected, Parker told "Squawk on the Street." "[So] we have to reassess."

Stocks have performed well since the beginning of the year.



The S&P 500, in particular, is having its best January since 1997. The index has risen 11 of the past 14 sessions and has not yet fallen in back-to-back sessions this year.

The tax bill, signed into law by President Donald Trump last month, included a reduction in the corporate rate to 21 percent.

Several major companies announced they would give employees one-time bonuses or higher wages as a result.

"You're hearing shifts in corporate behavior," Park said. "A tilt towards investment. That money [is] flowing into the economy."

Earlier Tuesday, Bridgewater Associates founder Ray Dalio told CNBC the tax cut could lead to some big gains for the stock market.

Park agreed with the billionaire hedge fund pioneer's assessment.

"We're tracking in line with our view," Park said. "Markets always have pullbacks but we still see further upside through the course of this year."

Also on "Squawk on the Street" Tuesday, Baird Chief Investment Strategist Bruce Bittles said he believes the market is healthy. But he said he's concerned about overly bullish investor sentiment.

"When everybody is on the same side of the boat ... you might look for a pullback," Bittles said. The pullback, however, would be "limited" in time and price, he said.