Stock Market Briefing: Selected P/E Ratios

Transcription

1 Stock Market Briefing: Selected P/E Ratios December 29, 17 Dr. Edward Yardeni Joe Abbott Mali Quintana Please visit our sites at www. blog. thinking outside the box

2 Table Of Contents Table Of Contents Forward P/E: S&P 00/0/ Median Forward P/E: S&P 00 4 Forward P/E: Russell 00 P/E & PEG: S&P 00 6 Trailing P/E 7 P/E -9 Forward P/E: Growth vs Value December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

3 Forward P/E: S&P 00/0/600 1 Figure 1. FORWARD P/E RATIOS FOR S&P INDEXES* (daily) S&P 00 LargeCap (1.3) / S&P 0 MidCap (1.4) / S&P 600 SmallCap (.1) / * Price divided by 2-week forward consensus expected operating earnings per share. Page 1 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

4 Forward P/E: S&P 00/0/ Figure 2. FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES* (weekly) 32 2 S&P 00 LargeCap (1.3) / S&P 0 MidCap (1.4) / S&P 600 SmallCap (.2) / * Weekly stock price index divided by 2-week forward consensus expected operating earnings per share Source: Thomson Reuters I/B/E/S and Standard & Poor s. Page 2 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

5 Forward P/E: S&P 00/0/ Figure 3. FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES* (daily) 2 26 S&P 00 LargeCap (1.3) S&P 0 MidCap (1.4) S&P 600 SmallCap (.1) / * Daily stock price index divided by 2-week forward consensus expected operating earnings per share. Source: Thomson Reuters I/B/E/S and Standard & Poor s Figure 4. FORWARD P/E RATIOS FOR S&P INDEXES* (weekly) / 1 S&P 00 LargeCap (1.3) S&P 0 MidCap (1.4) S&P 600 SmallCap (.2) * Price divided by 2-week forward consensus expected operating earnings per share. Page 3 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

6 Figure. Median Forward P/E: S&P 00 FORWARD P/E RATIO FOR S&P 00 (MEDIAN) 1 Oct 1 6 S&P 00 Median Forward P/E (1.1) Figure 6. FORWARD P/E RATIOS FOR S&P 00 (ACTUAL & MEDIAN) Nov S&P 00 Forward P/E Ratio* (1.4) S&P 00 Median Forward P/E (1.1) * Average weekly price divided by 2-week forward consensus expected operating earnings per share. Page 4 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

7 3 Figure 7. Forward P/E: Russell 00 FORWARD P/E RATIOS FOR RUSSELL 00* (weekly) Russell 00 (26.7) Russell 00 Growth (34.3) Russell 00 Value (21.4) 3 / * Price divided by -month (2-week) forward consensus expected operating earnings per share. Monthly data through December 0, weekly thereafter. 3 Figure. FORWARD P/E RATIOS FOR US SMALLCAP * P/E capped at 3 due to extreme values. Russell 00 (26.7) S&P 600 SmallCap (.2) 3 / * Price divided by -month (2-week) forward consensus expected operating earnings per share. Monthly data through December 0, weekly thereafter. Page / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

8 2 Figure 9. P/E & PEG: S&P S&P 00 Reported Trailing P/E S&P 00 Forward P/E* 1979-present / * 2-week forward consensus expected S&P 00 operating earnings per share. Monthly from January 1979 through April 1994, then weekly. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: Thomson Reuters I/B/E/S and Standard & Poor s. 1.7 Figure. S&P 00 VALUATION: PEG RATIO 1.7 PEG Ratio* (1.4) / * Forward P/E divided by LTEG, which is -year forward consensus expected annual earnings growth. Monthly through 0, then weekly. Page 6 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

9 60 Figure 11. Trailing P/E P/E RATIO FOR S&P 00 (Using Trailing Reported Earnings)* 60 0 Capped at 4 due to extreme values 0 Q * Using 4-quarter trailing reported earnings. Source: Standard & Poor s Figure. S&P 00 P/E RATIOS S&P 00 P/Es Trailing (using operating earnings)* (.) Forward** (1.0) 32 2 Q3 Nov * Using quarterly average of daily data for S&P 00 price index, and 4-quarter trailing operating earnings. ** S&P 00 stock price index divided by S&P 00 -month forward consensus expected operating earnings. Source: Thomson Reuters I/B/E/S and Standard & Poor s. Page 7 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

10 60 Figure 13. P/E US EQUITY MARKET CAPITALIZATION: NONFINANCIAL CORPORATIONS (as a ratio of NFC after-tax profits from current production*) Q * Including IVA and CCadj. These two adjustments restate the historical cost basis used in profits tax accounting for inventory withdrawals and depreciation to the current cost measures used in GDP. Source: Haver Analytics. Figure. US EQUITY MARKET CAPITALIZATION EXCLUDING FOREIGN ISSUES 3 As a ratio of: After-Tax Profits from Current Production* (Avg = 13.) Corporate Cash Flow** (Avg = 9.1) 3 Q3 Q * Including IVA and CCadj. These two adjustments restate the historical cost basis used in profits tax accounting for inventory withdrawals and depreciation to the current cost measures used in GDP. ** After-tax operating retained earnings plus tax-return-based depreciation. Source: Thomson Reuters I/B/E/S, US Department of Commerce, Bureau of Economic Analysis, Federal Reserve Board Flow of Funds Accounts, and Standard & Poor s Corporation. Page / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

11 Figure. P/E FORWARD P/E RATIOS FOR S&P 00 STOCK PRICE INDEX* S&P 00 (1.) S&P 00 Technology (1.) 3 / * Stock price index divided by forward consensus expected operating earnings per share. Monthly through December 0, then weekly. Figure. FORWARD P/E RATIOS FOR S&P 00* S&P 00 (1.) S&P 00 Ex Technology (1.4) / * Stock price index divided by forward consensus expected operating earnings per share. Monthly through December 0, then weekly. Page 9 / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

12 4 Figure 17. Forward P/E: Growth vs Value FORWARD P/E RATIOS FOR S&P 00 CITIGROUP GROWTH vs. VALUE* 4 3 Growth (21.0) Value (.4) 3 / * Price divided by -month (2-week) forward consensus expected operating earnings per share. Monthly data through December 0, weekly thereafter Figure 1. PEG RATIOS FOR S&P 00 CITIGROUP GROWTH vs. VALUE* Growth (1.0) Value (1.39) / * Using -year forward consensus expected earnings growth and price divided by -month (2-week) forward consensus expected operating earnings per share. Monthly data through December 0, weekly thereafter. Page / December 29, 17 / Stock Market Briefing: Selected P/E Ratios www.

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