Stock Market Briefing: Selected P/E RatiosStock Market Briefing: Selected P/E Ratios Yardeni...
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Stock Market Briefing: Selected P/E Ratios Yardeni Research, Inc. June 5, 2020 Dr. Edward Yardeni 516-972-7683 [email protected] Joe Abbott 732-497-5306 [email protected] Mali Quintana 480-664-1333 [email protected] Please visit our sites at www.yardeni.com blog.yardeni.com thinking outside the box
Transcript of Stock Market Briefing: Selected P/E RatiosStock Market Briefing: Selected P/E Ratios Yardeni...
Stock Market Briefing:Selected P/E Ratios
Yardeni Research, Inc.
June 5, 2020
Dr. Edward Yardeni516-972-7683
Joe Abbott732-497-5306
Mali Quintana480-664-1333
Please visit our sites atwww.yardeni.comblog.yardeni.com
thinking outside the box
Table Of Contents Table Of ContentsTable Of Contents
June 5, 2020 / Stock Market Briefing: Selected P/E Ratios www.yardeni.com
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Forward P/E: S&P 500/400/600 1-3Median Forward P/E: S&P 500 4Forward P/E: Russell 2000 5P/E & PEG: S&P 500 6Trailing P/E 7P/E 8-9Forward P/E: Growth vs Value 10
Figure 1.
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
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12
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20
22
24
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10
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20
22
24
6/5FORWARD P/E RATIOS FOR S&P INDEXES*(daily)
S&P 500 LargeCap (22.6)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
10
12
14
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20
22
24
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22
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S&P 400 MidCap (23.1)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
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12
14
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20
22
24
26
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26 6/5
S&P 600 SmallCap (26.1)
* Price divided by 52-week forward consensus expected operating earnings per share. Source: I/B/E/S data by Refinitiv and Standard & Poor’s.
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Forward P/E: S&P 500/400/600
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Figure 2.
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
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16
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24
28
32
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FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES*(weekly)
S&P 500 LargeCap (21.5)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
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16
20
24
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S&P 400 MidCap (21.3)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
12
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20
24
8
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20
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S&P 600 SmallCap (23.3)
* Weekly stock price index divided by 52-week forward consensus expected operating earnings per share Source: I/B/E/S data by Refinitiv and Standard & Poor’s.
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Forward P/E: S&P 500/400/600
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
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12
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22
24
26
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26
6/5
FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES*(daily)
S&P Forward P/EsS&P 500 (22.6)S&P 400 (23.1)S&P 600 (26.1)
* Daily stock price index divided by 52-week forward consensus expected operating earnings per share.Source: Standard & Poor’s and I/B/E/S data by Refinitiv.
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Figure 3.
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228
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FORWARD P/E RATIOS FOR S&P INDEXES*(weekly)
S&P 500 LargeCap (21.5)S&P 400 MidCap (21.3)S&P 600 SmallCap (23.3)
* Price divided by 52-week forward consensus expected operating earnings per share.Source: I/B/E/S data by Refinitiv.
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Figure 4.
Forward P/E: S&P 500/400/600
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82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 226
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20
22
24
6
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14
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22
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Mar
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FORWARD P/E RATIO FOR S&P 500 (MEDIAN)
S&P 500 Median Forward P/E (14.8)Average Median Forward P/E (15.2)
Source: I/B/E/S data by Refinitiv.
Figure 5.
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 225
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25
30
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25
30
May
FORWARD P/E RATIOS FOR S&P 500 (ACTUAL & MEDIAN)
S&P 500 Forward P/E Ratio* (22.0)
S&P 500 Median Forward P/E (14.8)
* Average weekly price divided by 52-week forward consensus expected operating earnings per share.Source: I/B/E/S data by Refinitiv.
Figure 6.
Median Forward P/E: S&P 500
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 202210
20
30
40
50
60
70
80
90
100
110
120
130
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110
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130
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FORWARD P/E RATIOS FOR RUSSELL 2000*(weekly)
Russell 2000 (49.8)Russell 2000 Growth (122.3)Russell 2000 Value (27.8)
* Price divided by 12-month (52-week) forward consensus expected operating earnings per share. Monthly data through December 2005, weekly thereafter.Source: I/B/E/S data by Refinitiv.
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Figure 7.
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 202210
15
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30
35
40
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40
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FORWARD P/E RATIOS FOR US SMALLCAP *
P/E capped at 35 due to extreme values.
Russell 2000 (35.0)S&P 600 SmallCap (23.3)
* Price divided by 12-month (52-week) forward consensus expected operating earnings per share. Monthly data through December 2005, weekly thereafter.Source: I/B/E/S data by Refinitiv.
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Figure 8.
Forward P/E: Russell 2000
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60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 244
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S&P 500 Reported Trailing P/E1960-1978
S&P 500 Forward P/E* 1979-present
5/28
* 52-week forward consensus expected S&P 500 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: I/B/E/S data by Refinitiv and Standard & Poor’s.
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Figure 9.
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
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S&P 500 VALUATION: PEG RATIO
PEG Ratio* (2.2)
* Forward P/E divided by LTEG, which is 5-year forward consensus expected annual earnings growth. Monthly through 2005, then weekly.Source: I/B/E/S data by Refinitiv .
Figure 10.
P/E & PEG: S&P 500
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35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 250
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60
0
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60
Q4
P/E RATIO FOR S&P 500 (Using Trailing Reported Earnings)*
Capped at 45 due to extreme values
* Using 4-quarter trailing reported earnings.Source: Standard & Poor’s.
Figure 11.
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 228
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32
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Q1
May
S&P 500 P/E RATIOSS&P 500 P/Es
Trailing (using operating earnings)* (22.1)Forward** (20.1)
* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing operating earnings.** S&P 500 stock price index divided by S&P 500 12-month forward consensus expected operating earnings.
Source: I/B/E/S data by Refinitiv and Standard & Poor’s.
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Figure 12.
Trailing P/E
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60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 240
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0
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Q4
US EQUITY MARKET CAPITALIZATION: NONFINANCIAL CORPORATIONS(as a ratio of NFC after-tax profits from current production*)
* 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 13.
60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 240
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35
40
0
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Q4
Q4
US EQUITY MARKET CAPITALIZATION EXCLUDING FOREIGN ISSUES
As a ratio of:After-Tax Profits from Current Production* (Avg = 13.8)
Corporate Cash Flow** (Avg = 9.1)
* Including IVA and CCadj. These two adjustments restate the historical cost basis used in profits tax accounting for inventory withdrawals anddepreciation 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, andStandard & Poor’s Corporation.
Figure 14.
P/E
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90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 225
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25
35
45
55
5
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45
55
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FORWARD P/E RATIOS FOR S&P 500 STOCK PRICE INDEX*
S&P 500 (21.7)
S&P 500 Technology (23.1)
* Stock price index divided by forward consensus expected operating earnings per share. Monthly through December 2005, then weekly.Source: I/B/E/S data by Refinitiv .
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Figure 15.
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 225
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30
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FORWARD P/E RATIOS FOR S&P 500*
S&P 500 (21.7)
S&P 500 Ex Technology (21.3)
* Stock price index divided by forward consensus expected operating earnings per share. Monthly through December 2005, then weekly.Source: I/B/E/S data by Refinitiv .
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Figure 16.
P/E
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95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 225
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35
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45
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45
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FORWARD P/E RATIOS FOR S&P 500 CITIGROUP GROWTH vs. VALUE*
Growth (26.3)
Value (17.5)
* Price divided by 12-month (52-week) forward consensus expected operating earnings per share. Monthly data through December 2005, weekly thereafter.Source: I/B/E/S data by Refinitiv .
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Figure 17.
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22.6
.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
.6
.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
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PEG RATIOS FOR S&P 500 CITIGROUP GROWTH vs. VALUE*
Growth (2.04)Value (3.39)
* Using 5-year forward consensus expected earnings growth and price divided by 12-month (52-week) forward consensus expected operating earnings per share.Monthly data through December 2005, weekly thereafter.Source: I/B/E/S data by Refinitiv.
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Figure 18.
Forward P/E: Growth vs Value
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