Global Index Briefing: Japan Financials Sector MSCI November 28, 18 Dr. Ed Yardeni 516-972-7683 eyardeni@ Joe Abbott 732-497-536 jabbott@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents Japan Financials Sector MSCI Stock Price Index 1 Earnings 2 Revenues & Margins 3 Valuation 4 November 28, 18 / Global Index Briefing: Japan Financials Sector MSCI www.
285 235 Figure 1. Stock Price Index JAPAN FINANCIALS SECTOR MSCI STOCK PRICE INDEX (ratio scale) 285 235 185 185 135 135 85 85 35 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 -day moving average (adjusted using monthly price data through 5 and weekly thereafter). Source: Morgan Stanley Capital International & Thomson Reuters I/B/E/S. 35 Figure 2. JAPAN FINANCIALS SECTOR MSCI, FORWARD EARNINGS, & VALUATION 1 Japan Financials Sector MSCI Index /18 Blue Angels Implied Price Index* /18 x 1 14 14 x15 1 1 8 x 8 7 8 9 11 12 13 14 15 16 17 18 19 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 5, weekly thereafter. Source: Standard & Poor s Corporation and I/B/E/S data by Refinitiv. Page 1 / November 28, 18 / Global Index Briefing: Japan Financials Sector MSCI www.
Earnings 11 9 Figure 3. JAPAN FINANCIALS SECTOR MSCI EARNINGS PER SHARE (analysts average forecasts, ratio scale) 18 19 11 9 7 7 5 5 3 3 Consensus Forecasts Annual estimates Forward earnings* 1 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 1 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 5, weekly thereafter. Figure 4. JAPAN FINANCIALS SECTOR MSCI INDEX NET EARNINGS REVISIONS* Nov - - - - -3-4 NERI Sep 3.78 Oct 1.53 Nov 1.32 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19-3 -4 * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Page 2 / November 28, 18 / Global Index Briefing: Japan Financials Sector MSCI www.
Figure 5. Revenues & Margins JAPAN FINANCIALS SECTOR MSCI REVENUES PER SHARE (analysts average forecasts, ratio scale) 9 8 Consensus Forecasts Annual estimates Forward revenues* 19 9 8 18 6 6 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 5, weekly thereafter. 16 14 Figure 6. JAPAN FINANCIALS SECTOR MSCI PROFIT MARGIN (using analysts average earnings and revenues forecasts) 16 14 12 12 18 19 8 8 6 4 Consensus Forecasts Annual estimates Forward profit margin* (.) 6 4 2 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 2 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 5, weekly thereafter. Page 3 / November 28, 18 / Global Index Briefing: Japan Financials Sector MSCI www.
Valuation Figure 7. JAPAN FINANCIALS SECTOR MSCI VALUATION MULTIPLE* 6 6 Forward P/E (9.3) 4 4 3 3 P/E capped at 6 due to extreme values. 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 * Price divided by forward consensus expected earnings per share. Monthly data through December 5, weekly thereafter. 3.5 Figure 8. JAPAN FINANCIALS SECTOR MSCI RELATIVE VALUATION* 3.5 3. 3. 2.5 Relative P/E (.69) 2.5 2. 2. 1.5 1.5 1. 1..5 Relative valuation capped at 3. due to extreme values. 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19.5 * Forward P/E of index relative to All Country World MSCI forward P/E. Monthly data through December 5, weekly thereafter. Page 4 / November 28, 18 / Global Index Briefing: Japan Financials Sector MSCI www.
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