Global Index Briefing: EMU MSCI February 1, 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 EMU MSCI Stock Price Index 1 Blue Angels Forward Earnings and Valuation 2 Earnings 3 Revenues 4 NERI & Margins Earnings Growth & Valuation 6 February 1, / Global Index Briefing: EMU MSCI www.
Stock Price Index 3 270 Figure 1. EMU MSCI INDEX (ratio scale) 3 270 230 Local currency US$ 230 0 0 10 10 1 1 70 9 96 97 98 99 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 Source: MSCI. 70 1.3 1.2 Figure 2. EMU MSCI INDEX CURRENCY RATIO (US$ index / local currency index) 1.3 1.2 1.1 1.1 1.0 1.0.9.9.8.8.7.7.6 9 96 97 98 99 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 Source: MSCI..6 Page 1 / February 1, / Global Index Briefing: EMU MSCI www.
30 300 20 Figure 3. Blue Angels Forward Earnings and Valuation EMU MSCI, FORWARD EARNINGS, & VALUATION (in local currency) EMU MSCI Index 0/ Blue Angels Implied Price Index* 02/01/ x16 30 300 20 0 x12 0 10 x8 10 0 0 0 07 08 09 11 12 13 14 1 16 0 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 0, weekly thereafter. Source: MSCI and Thomson Reuters I/B/E/S. 42 Figure 4. EMU MSCI, FORWARD EARNINGS, & VALUATION (in US$) 42 30 EMU MSCI Index 0/ Blue Angels Implied Price Index* 02/01/ 30 27 x16 27 0 x12 0 12 x8 12 0 07 08 09 11 12 13 14 1 16 0 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 0, weekly thereafter. Source: MSCI and Thomson Reuters I/B/E/S. Page 2 / February 1, / Global Index Briefing: EMU MSCI www.
23 Figure. Earnings EMU MSCI EARNINGS PER SHARE (in local currency) (analysts average forecasts, ratio scale) 23 14 14 11 Forward earnings* 11 8 9 96 97 98 99 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 8 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 0, then weekly. 30 2 Figure 6. EMU MSCI EARNINGS PER SHARE (in US$) (analysts average forecasts, ratio scale) 30 2 1 1 Forward earnings* 9 96 97 98 99 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 0, then weekly. Page 3 / February 1, / Global Index Briefing: EMU MSCI www.
23 Figure 7. Revenues EMU MSCI REVENUES PER SHARE (in local currency) (analysts average forecasts, ratio scale) 23 22 22 21 21 Forward revenues* 04 0 06 07 08 09 11 12 13 14 1 16 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 0, then weekly. 300 280 Figure 8. EMU MSCI REVENUES PER SHARE (in US$) (analysts average forecasts, ratio scale) 300 280 260 Forward revenues* 260 240 240 2 2 0 0 0 0 160 04 0 06 07 08 09 11 12 13 14 1 16 160 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 0, then weekly. Page 4 / February 1, / Global Index Briefing: EMU MSCI www.
1 Figure 9. EMU MSCI INDEX NET EARNINGS REVISIONS* NERI & Margins 1 0 - Jan 0 - - - -1-1 - -2-30 NERI Nov -3.91 Dec -2.82 Jan -1.11 9 96 97 98 99 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 - -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. Figure. EMU MSCI PROFIT MARGIN (using analysts average earnings and revenues forecasts) 9 Forward profit margin* (7.6) 9 8 8 7 7 6 6 04 0 06 07 08 09 11 12 13 14 1 16 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 0, weekly thereafter. Page / February 1, / Global Index Briefing: EMU MSCI www.
0 40 30 Figure 11. EMU MSCI STEG, STRG, & LTEG (percent) Earnings Growth & Valuation LTEG* (13.3) STEG* (9.9) STRG* (3.7) 0 40 30 0 0-2 9 96 97 98 99 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 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 0, weekly thereafter. Figure 12. EMU MSCI VALUATION Forward P/E* (14.) - 2 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 00 01 02 03 04 0 06 07 08 09 11 12 13 14 1 16 1.0. * Price divided by forward consensus expected operating earnings per share. Monthly through December 0, then weekly. ** Forward P/E relative to MSCI World forward P/E. *** Forward P/E relative to consensus -year LTEG forecast. Page 6 / February 1, / Global Index Briefing: EMU MSCI www.
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