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Stock Market Briefing:Selected P/E Ratios

Yardeni Research, Inc.

May 22, 2018

Dr. Edward Yardeni516-972-7683

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Joe Abbott732-497-5306

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Mali Quintana480-664-1333

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Table Of Contents Table Of ContentsTable Of Contents

May 22, 2018 / Stock Market Briefing: Selected P/E Ratios www.yardeni.com


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 20198

10

12

14

16

18

20

8

10

12

14

16

18

20

5/22

FORWARD P/E RATIOS FOR S&P INDEXES*(daily)

S&P 500 LargeCap (16.3)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20198

10

12

14

16

18

20

8

10

12

14

16

18

20

5/22

S&P 400 MidCap (16.5)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20198

10

12

14

16

18

20

22

8

10

12

14

16

18

20

22

5/22

S&P 600 SmallCap (17.7)

* Price divided by 52-week forward consensus expected operating earnings per share. Source: Thomson Reuters I/B/E/S.

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Forward P/E: S&P 500/400/600

Page 1 / May 22, 2018 / Stock Market Briefing: Selected P/E Ratios www.yardeni.com


Figure 2.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20198

12

16

20

24

28

32

8

12

16

20

24

28

32

5/18

FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES*(weekly)

S&P 500 LargeCap (16.2)

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20198

12

16

20

24

8

12

16

20

24

5/18

S&P 400 MidCap (16.5)

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20198

12

16

20

24

8

12

16

20

24

5/18

S&P 600 SmallCap (17.7)

* Weekly stock price index divided by 52-week forward consensus expected operating earnings per share Source: Thomson Reuters I/B/E/S and Standard & Poor’s.

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Forward P/E: S&P 500/400/600



1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20198

10

12

14

16

18

20

22

24

26

28

8

10

12

14

16

18

20

22

24

26

28

5/22

FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES*(daily)

S&P 500 LargeCap (16.3)S&P 400 MidCap (16.5)S&P 600 SmallCap (17.7)

* Daily stock price index divided by 52-week forward consensus expected operating earnings per share.Source: Thomson Reuters I/B/E/S and Standard & Poor’s.

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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 20198

10

12

14

16

18

20

22

24

26

28

8

10

12

14

16

18

20

22

24

26

28

5/18

FORWARD P/E RATIOS FOR S&P INDEXES*(weekly)

S&P 500 LargeCap (16.2)S&P 400 MidCap (16.5)S&P 600 SmallCap (17.7)

* Price divided by 52-week forward consensus expected operating earnings per share.Source: Thomson Reuters I/B/E/S.

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Figure 4.

Forward P/E: S&P 500/400/600



82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 206

8

10

12

14

16

18

20

22

24

6

8

10

12

14

16

18

20

22

24

Apr

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FORWARD P/E RATIO FOR S&P 500 (MEDIAN)

S&P 500 Median Forward P/E (16.8)

Source: Thomson Reuters I/B/E/S.

Figure 5.

82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 205

10

15

20

25

30

5

10

15

20

25

30

Apr

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FORWARD P/E RATIOS FOR S&P 500 (ACTUAL & MEDIAN)

S&P 500 Forward P/E Ratio* (16.3)

S&P 500 Median Forward P/E (16.8)

* Average weekly price divided by 52-week forward consensus expected operating earnings per share.Source: Thomson Reuters I/B/E/S.

Figure 6.

Median Forward P/E: S&P 500



2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202010

15

20

25

30

35

40

10

15

20

25

30

35

40

5/17

FORWARD P/E RATIOS FOR RUSSELL 2000*(weekly)

Russell 2000 (24.3)Russell 2000 Growth (31.0)Russell 2000 Value (19.4)

* Price divided by 12-month (52-week) forward consensus expected operating earnings per share. Monthly data through December 2005, weekly thereafter.Source: Thomson Reuters I/B/E/S.

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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 201910

15

20

25

30

35

10

15

20

25

30

35

5/17

FORWARD P/E RATIOS FOR US SMALLCAP *

P/E capped at 35 due to extreme values. Russell 2000 (24.3)S&P 600 SmallCap (17.7)


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Figure 8.

Forward P/E: Russell 2000



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 20 224

6

8

10

12

14

16

18

20

22

24

26

28

4

6

8

10

12

14

16

18

20

22

24

26

28

S&P 500 Reported Trailing P/E1960-1978

S&P 500 Forward P/E* 1979-present

5/17

* 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: Thomson Reuters I/B/E/S and Standard & Poor’s.

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Figure 9.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020.75

1.00

1.25

1.50

1.75

.75

1.00

1.25

1.50

1.75

5/17

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S&P 500 VALUATION: PEG RATIO

PEG Ratio* (1.0)

* Forward P/E divided by LTEG, which is 5-year forward consensus expected annual earnings growth. Monthly through 2005, then weekly.Source: Thomson Reuters I/B/E/S.

Figure 10.

P/E & PEG: S&P 500



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 21 230

10

20

30

40

50

60

0

10

20

30

40

50

60

Q1

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 19 208

12

16

20

24

28

32

8

12

16

20

24

28

32

Q1

Apr

S&P 500 P/E RATIOSS&P 500 P/Es

Trailing (using operating earnings)* (20.7)Forward** (16.8)

* 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: Thomson Reuters I/B/E/S and Standard & Poor’s.

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Figure 12.

Trailing P/E



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 18 200

10

20

30

40

50

60

0

10

20

30

40

50

60

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 18 200

5

10

15

20

25

30

35

40

0

5

10

15

20

25

30

35

40

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



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 19 205

15

25

35

45

55

5

15

25

35

45

55

5/17

FORWARD P/E RATIOS FOR S&P 500 STOCK PRICE INDEX*

S&P 500 (16.5)

S&P 500 Technology (18.3)

* Stock price index divided by forward consensus expected operating earnings per share. Monthly through December 2005, then weekly.Source: Thomson Reuters I/B/E/S.

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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 19 205

10

15

20

25

30

5

10

15

20

25

30

5/17

FORWARD P/E RATIOS FOR S&P 500*

S&P 500 (16.5)

S&P 500 Ex Technology (16.0)

* Stock price index divided by forward consensus expected operating earnings per share. Monthly through December 2005, then weekly.Source: Thomson Reuters I/B/E/S.

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Figure 16.

P/E



1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20195

10

15

20

25

30

35

40

45

5

10

15

20

25

30

35

40

45

5/17

FORWARD P/E RATIOS FOR S&P 500 CITIGROUP GROWTH vs. VALUE*

Growth (19.3)

Value (14.2)


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Figure 17.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019.6

.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

.6

.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

5/17

PEG RATIOS FOR S&P 500 CITIGROUP GROWTH vs. VALUE*

Growth (1.18)Value (0.92)

* 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: Thomson Reuters I/B/E/S.

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Figure 18.

Forward P/E: Growth vs Value



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