An interesting chart from the Citi report. This clearly shows that growth forms a large part of valuations for MSCI global companies. What is worrying is - the growth component in valuations is more than even in Dec07 or Dec06, the earlier market peaks.
This is what the report says about the chart.
It displays the PE multiple as the sum of two parts — the base component that reflects the value of the existing earnings stream, and a growth component that captures the value of the expected future earnings growth. Prior to the crisis, MSCI constituent companies typically derived two-thirds of their value from their current earnings stream and one-third from expected growth prospects. Since October 2008 and continuing into the spring of 2009, the expected value of growth essentially disappeared as investors focused primarily on survival.
As valuations and market confidence have rebounded over the past few months, the importance of growth has returned sharply. In fact, given the relatively low current earnings of many companies, the growth premium is a bigger component of the P/E multiple than ever before, accounting for 40% of overall value.