Already-expensive stock prices will get even more expensive

Many Wall Street analysts point to the expensive market—especially amid uncertain times—as a key reason for downside ahead.

After all, the S&P 500 (^GSPC) price-earnings multiple is up 55% over the past five years, increasing from 10.5x to 16.2x currently. It’s not surprising that many investors would question the sustainability of this rise.

But RBC’s Jonathan Golub said multiples could expand even further.

Cash Flow Generation: Companies have become much more efficient, Golub explained, and are generating over 20% more free cash flow from every dollar of earnings.

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