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  • A New Worry for Stock Market Bulls [View article]
    Zagregzagreb: I'm not that shocked by "estimated future earnings". The actual earnings for the most recent quarter were $13.81 (operating). In the MRQ "operating" and "as reported" earnings were similar.

    If you just assume companies will maintain earnings at this level you get a 12m forward of $55.24 giving a PE of just under 19 at current value of S&P 1043.

    If you look at the spreadsheet link to S&P I provided a bit earlier, you'll see in the 20001-2002 recession the multiple was generally much higher. In the current case growth is likely harder to come by than in the previous period so a lower multiple is reasonable.

    In my view, it's unlikely that spending will be drastically reduced from the current pace so earnings should be at least maintained.
    Sep 11 10:27 am |Rating: 0 0
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