Global Index Briefing: EAFE MSCI June 29, 20 Dr. Ed Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-6 jabbott@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents EAFE MSCI Stock Price Index 1 Blue Angels Forward Earnings and Valuation 2 Earnings 3 Revenues 4 NERI & Margins Earnings Growth & Valuation 6 June 29, 20 / Global Index Briefing: EAFE MSCI www.
Stock Price Index 0 20 Figure 1. EAFE MSCI INDEX (ratio scale) Local currency 6/29 32 0 27 US$ 20 200 22 200 12 0 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 Source: MSCI. 0 1.4 1.3 Figure 2. EAFE MSCI INDEX CURRENCY RATIO (US$ index / local currency index) 1.4 1.3 1.2 1.2 1.1 1.1 1.0 6/29 1.0.9.9.8.8.7 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 Source: MSCI..7 Page 1 / June 29, 20 / Global Index Briefing: EAFE MSCI www.
37 32 27 Figure 3. Blue Angels Forward Earnings and Valuation EAFE MSCI, FORWARD EARNINGS, & VALUATION (in local currency) EAFE MSCI Index 06/22/ Blue Angels Implied Price Index* x16 06/22/ 37 32 27 22 x12 22 x8 12 12 7 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 7 * 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. 42 Figure 4. EAFE MSCI, FORWARD EARNINGS, & VALUATION (in US$) 42 37 32 27 EAFE MSCI Index 06/29/ Blue Angels Implied Price Index* 0/ x16 37 32 27 22 x12 22 12 x8 12 7 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 7 * Implied price index calculated using forward earnings times forward P/Es. Monthly through December 200, weekly thereafter. Source: MSCI and Thomson Reuters I/B/E/S. Page 2 / June 29, 20 / Global Index Briefing: EAFE MSCI www.
0 1 1 80 Figure. Earnings EAFE MSCI EARNINGS PER SHARE (in local currency) (analysts average forecasts, ratio scale) Forward earnings* 0 1 1 80 19 6/22 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. 144 124 4 84 64 44 Figure 6. EAFE MSCI EARNINGS PER SHARE (in US$) (analysts average forecasts, ratio scale) Forward earnings* 144 124 4 84 64 44 24 24 19 4 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 4 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. Page 3 / June 29, 20 / Global Index Briefing: EAFE MSCI www.
270 Figure 7. Revenues EAFE MSCI REVENUES PER SHARE (in local currency) (analysts average forecasts, ratio scale) 270 20 20 2 2 19 6/22 2 2 190 Forward revenues* 190 0 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 0 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. 320 0 Figure 8. EAFE MSCI REVENUES PER SHARE (in US$) (analysts average forecasts, ratio scale) 320 0 280 280 260 260 240 240 220 19 220 200 Forward revenues* 200 0 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 0 * Time-weighted average of consensus estimates for current year and next year. Monthly through December 200, then weekly. Page 4 / June 29, 20 / Global Index Briefing: EAFE MSCI www.
Figure 9. EAFE MSCI INDEX NET EARNINGS REVISIONS* NERI & Margins 0 Jun 0 - - - - -1-1 -20-20 -2 - NERI Apr -1.14 May -1.71 Jun -1.09 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019-2 - * 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. EAFE MSCI PROFIT MARGIN (using analysts average earnings and revenues forecasts) 9 9 19 8 8 7 7 6 Forward profit margin* (8.6) 6 4 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 4 * Time-weighted average of the consensus estimates for current year and next year. Monthly through December 200, weekly thereafter. Page / June 29, 20 / Global Index Briefing: EAFE MSCI www.
40 Figure 11. EAFE MSCI STEG, STRG, & LTEG (percent) Earnings Growth & Valuation LTEG* (.0) STEG* (7.3) STRG* (3.6) 40 20 20 0 0-2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 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. - 2 20 Figure 12. EAFE MSCI VALUATION Forward P/E* (13.7) 2 20 1 1 2. 2.0 Relative P/E** (0.9) PEG Ratio*** (1.4) 2. 2.0 1. 1. 1.0. PEG capped at 2.0 199 1996 1997 1998 1999 2000 2001 2002 2003 2004 200 2006 2007 2008 2009 20 2011 2012 2013 2014 201 2016 20 20 2019 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 / June 29, 20 / Global Index Briefing: EAFE MSCI www.
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