S&P 500 Forward Valuation Drops Below 20x for First Time in Extended Period

Price Action
โดย GuruFocus·Read original
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The S&P 500 Index's forward price-to-earnings ratio has slipped below 20 times earnings for the first time in an extended period, according to market data highlighted by strategist Mike Zaccardi on Friday. The move, based on data from The Daily Shot, raises the possibility that valuation compression could become a broader market theme during the second half of the year. The index remains valued above its long-term average forward multiple of roughly 15 times but is still well below levels reached during the late-1990s technology boom. A lower forward P/E indicates investors are paying less for each dollar of expected earnings over the coming 12 months, and further multiple contraction could occur if stock prices soften or earnings expectations improve faster than share prices.

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