Stock Market Briefing: S&P 500 Trailing P/E Ratios

S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.

May 27, 2022

Dr. Edward Yardeni

516-972-7683 eyardeni@

Joe Abbott

732-497-5306 jabbott@

Mali Quintana

480-664-1333 aquintana@

Please visit our sites at blog.

thinking outside the box

Table Of Contents Table Of Contents

Trailing P/E

1-5

May 27, 2022 / S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.



Figure 1.

32

S&P 500 P/E RATIOS

28

24

20

16

Trailing P/E

S&P 500 P/Es Trailing (using operating earnings)* (22.4) Forward** (19.7)

32

28

24 Q4

Feb

20

16

12

12



8

8

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 22 23 24

* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing operating earnings (I/B/E/S data). ** S&P 500 stock price index divided by S&P 500 12-month forward analysts' consensus expected operating earnings per share.

Source: I/B/E/S data by Refinitiv and Standard & Poor's.

Figure 2.

50

S&P 500 P/E RATIOS

45

50

Capped at 45 due to extreme values

45

40

40

35

S&P 500 P/Es

35

Trailing (using reported earnings)* (22.7)

Forward** (16.7)

30

30

25

25

Q1

20

20

May

15

15

10

10

5

5

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

* Using 4-quarter trailing reported earnings. ** S&P 500 stock price index divided by S&P 500 12-month forward consensus expected operating earnings.

Note: Shaded red areas denote S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: I/B/E/S data by Refinitiv and Standard & Poor's.

Page 1 / May 27, 2022 / S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.



Trailing P/E

Figure 3.

50

50

P/E RATIO FOR S&P 500 (Using Trailing Reported Earnings)*

40

Capped at 45 due to extreme values

40

30

30

Q4

20

20

10

10

0

0

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 25

* Using 4-quarter trailing reported earnings. Source: Standard & Poor's.

Figure 4.

35

S&P 500 P/E BASED ON TRAILING EARNINGS

30 Trailing P/E* (21.2)

25

Average = 15.5 20

35

30

25 Q1

20

15

15

10

10



5

5

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 25

* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing reported earnings through Q3-1988, then operating earnings. Source: Standard & Poor's.

Page 2 / May 27, 2022 / S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.



Trailing P/E

Figure 5.

35

S&P 500 P/E BASED ON TRAILING EARNINGS vs. CPI

30

Trailing P/E* (21.2)

CPI (yearly percent change) (8.3) 25

20

35

30

25 Q1

20

15

15

10

10

Apr

5

5

0

0



-5

-5

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 25

* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing reported earnings through Q4-1988, then operating earnings. Source: Standard & Poor's and Bureau of Economic Analysis.

Figure 6.

35

35

RULE OF 20: S&P 500 P/E BASED ON TRAILING EARNINGS

vs. CPI INFLATION

30

30

25

25

Q1

20

20

15

15

Apr

10

Trailing P/E* (21.2)

10

20 Minus CPI (yearly percent change) (11.7)

5

5



0

0

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 25

* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing reported earnings through Q3-1988, then operating earnings. Source: Standard & Poor's and Bureau of Economic Analysis.

Page 3 / May 27, 2022 / S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.



Trailing P/E

Figure 7.

35

S&P 500 P/E BASED ON TRAILING EARNINGS vs. 10-YEAR TREASURY BOND YIELD

Trailing P/E* (21.2) 30

10-Year Bond Yield (percent) (2.8) 25

20

35

30

25 Q1

20

15

15

10

10

5

5

Apr



0

0

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 25

* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing reported earnings through Q3-1988, then operating earnings. Source: Standard & Poor's and Federal Reserve Board.

Figure 8.

18

18

S&P 500 EARNINGS YIELD vs. 10-YEAR TREASURY BOND YIELD

(percent)

16

16

14

S&P 500 Earnings Yield* (4.7)

14

10-Year Bond Yield (2.8)

12

12

10

10

8

8

6

6

Q1

4

4

Apr

2

2



0

0

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 25

* Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing reported earnings through Q3-1988, then operating earnings. Source: Standard & Poor's and Federal Reserve Board.

Page 4 / May 27, 2022 / S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.



Trailing P/E

Figure 9.

25

S&P 500 EARNINGS YIELD & NOMINAL GDP GROWTH

Earnings Yield* (4.7) 20

Nominal GDP (yearly percent change) (10.6) 15

10

25

20

15

Q1

10

5

Q1

5

0

0

-5

-5



-10

-10

48 50 52 54 56 58 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 24 26

* S&P 500 trailing earnings divided by stock price index. Using quarterly average of daily data for S&P 500 price index, and 4-quarter trailing reported earnings through Q3-1988, then operating earnings. Source: Standard & Poor's Corporation and Bureau of Economic Analysis.

Page 5 / May 27, 2022 / S&P 500 Trailing P/E Ratios

Yardeni Research, Inc.



Copyright (c) Yardeni Research, Inc. 2022. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports and podcasts posted on , bhltotpg:./y/barlodgen.yi.acrodmen,odmYRI's Apps are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments.

The text, images, and other materials contained or displayed on any Yardeni Research, Inc. product, service, report, email or website are proprietary to Yardeni Research, Inc. and constitute valuable intellectual property. No material from any part of , bhltotpg:./y/barlodgen.yia.crodmen,odmYRI's Apps may be downloaded, transmitted, broadcast, transferred, assigned, reproduced or in any other way used or otherwise disseminated in any form to any person or entity, without the explicit written consent of Yardeni Research, Inc. All unauthorized reproduction or other use of material from Yardeni Research, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Yardeni Research, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Yardeni Research, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

The recipient should check any email and any attachments for the presence of viruses. Yardeni Research, Inc. accepts no liability for any damage caused by any virus transmitted by this company's emails, website, blog and Apps. Additional information available on request.s@

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download