Global Index Briefing: Developed Europe MSCI February 6, 20 Dr. Ed Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-306 jabbott@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents Developed Europe MSCI Stock Price Index 1 Blue Angels Forward Earnings and Valuation 2 Earnings 3 Revenues 4 NERI & Margins Earnings Growth & Valuation 6 February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
Stock Price Index 200 20 Figure 1. DEVELOPED EUROPE MSCI INDEX (ratio scale) 2600 2200 Local currency 00 US$ 2/6 00 1300 10 900 00 00 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 Source: MSCI. 600 1. 1.4 Figure 2. DEVELOPED EUROPE MSCI INDEX CURRENCY RATIO (US$ index / local currency index) 1. 1.4 1.3 1.3 1.2 1.1 2/6 1.2 1.1 1.0 1.0.9.9.8 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 Source: MSCI..8 Page 1 / February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
220 0 Figure 3. Blue Angels Forward Earnings and Valuation DEVELOPED EUROPE MSCI, FORWARD EARNINGS, & VALUATION (in local currency) Developed Europe MSCI Index 02/02/ Blue Angels Implied Price Index* 01/26/ x1 220 0 x 70 70 x 20 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 20 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 200, weekly thereafter. Source: MSCI and Thomson Reuters I/B/E/S. 320 270 Figure 4. DEVELOPED EUROPE MSCI, FORWARD EARNINGS, & VALUATION (in US$) Developed Europe MSCI Index 02/06/ Blue Angels Implied Price Index* 0/ 320 270 220 220 0 x1 0 x 70 x 70 20 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 20 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 200, weekly thereafter. Source: MSCI and Thomson Reuters I/B/E/S. Page 2 / February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
160 1 Figure. Earnings DEVELOPED EUROPE MSCI EARNINGS PER SHARE (in local currency) (analysts average forecasts, ratio scale) 160 1 120 0 1/26 120 0 80 80 60 Forward earnings* 60 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. 220 0 Figure 6. DEVELOPED EUROPE MSCI EARNINGS PER SHARE (in US$) (analysts average forecasts, ratio scale) 220 0 160 160 130 130 0 0 70 70 Forward earnings* 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. Page 3 / February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
Revenues 147 10 Figure 7. DEVELOPED EUROPE MSCI REVENUES PER SHARE (in local currency) (analysts average forecasts, ratio scale) 147 10 132 1/26 132 1 1 10 10 2 Forward revenues* 2 90 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 90 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. 20 00 Figure 8. DEVELOPED EUROPE MSCI REVENUES PER SHARE (in US$) (analysts average forecasts, ratio scale) 20 00 00 00 100 100 1300 Forward revenues* 1300 10 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 10 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. Page 4 / February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
1 Figure 9. NERI & Margins DEVELOPED EUROPE MSCI INDEX NET EARNINGS REVISIONS* 1 0 Jan 0 - - - - -1-1 -20-2 -30 NERI Nov -2.72 Dec -2.32 Jan -0.71 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20-20 -2-30 * 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. 11 Figure. DEVELOPED EUROPE MSCI PROFIT MARGIN (using analysts average earnings and revenues forecasts) 11 9 9 8 8 7 7 6 Forward profit margin* (8.) 6 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 200, weekly thereafter. Page / February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
0 30 Figure 11. Earnings Growth & Valuation DEVELOPED EUROPE MSCI STEG, STRG, & LTEG (percent) LTEG* (13.9) STEG* (9.4) STRG* (4.2) 0 30 20 20 0 0-30 2 20 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 Note: STEG is year-ahead forward consensus expected short-term earnings growth. STRG is year-ahead forward consensus expected short-term revenue growth. LTEG is five-year consensus expected long-term earnings growth. Monthly data through 200, weekly thereafter. Figure 12. DEVELOPED EUROPE MSCI VALUATION Forward P/E* (1.3) - 30 2 20 1 1 2. 2.0 Relative P/E** (0.9) PEG Ratio*** (1.1) 2. 2.0 1. 1. 1.0. 9 96 97 98 99 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 20 1.0. * Price divided by forward consensus expected operating earnings per share. Monthly through December 200, then weekly. ** Forward P/E relative to MSCI World forward P/E. *** Forward P/E relative to consensus -year LTEG forecast. Page 6 / February 6, 20 / Global Index Briefing: Developed Europe MSCI www.
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