Valuation – Shiller Cyclically Adjusted Price/Earnings Ratio Higher inflation and lower corporate profitability structurally undermine the sustainability of U.S. equity valuations. Image: Goldman Sachs Global Investment Research
U.S. Equity Index P/E Valuations vs. History Despite recent price declines, neither the tech sector nor the S&P 500 looks historically cheap. Image: Goldman Sachs Global Investment Research
S&P 500 Sector P/E Valuations Relative to History Despite the recent market decline, several S&P 500 sectors remain overvalued by historical standards. Image: Goldman Sachs Global Investment Research
U.S. Stock Market Valuations – Combined P/E Ratio High P/E ratios in U.S. tech stocks are a double-edged sword: they reflect both the sector’s growth potential and the risks of overvaluation driven by investor optimism. Image: Topdown Charts
Valuation – PE10 Ratio USA vs. Rest of the World Investors seeking diversification and long-term growth may prefer emerging markets and non-U.S. developed markets over U.S. stocks due to their attractive valuations. Image: Topdown Charts
Valuation – Consensus Forward P/E vs. Expected EPS Growth The P/E premium reflects higher expected EPS growth, supported by a strong current correlation between EPS growth forecasts and P/E multiples. Image: Goldman Sachs Global Investment Research
Equities – Global Valuation Range While non-U.S. markets are cheaper relative to the U.S., their valuations remain closer to historical norms rather than deeply discounted levels that might indicate extraordinary buying opportunities. Image: Goldman Sachs Global Investment Research
Valuation – S&P 500 Forward P/E The S&P 500’s forward multiple remains historically high despite some moderation. A worsening economy could dampen corporate earnings growth, pressuring valuations and potentially driving markets lower. Image: Goldman Sachs Global Investment Research
S&P 500 Valuations Based On Forward Operating EPS The sharp market sell-off has triggered a reversion in S&P 500 valuations, which have dropped from 22.5x to 18.5x forward earnings over the past month. With the long-term average near 16x, there may still be scope for further declines. Image: Real Investment Advice
Valuation – S&P 500 NTM P/E Investors assign a higher earnings multiple to the S&P 500 market cap-weighted index than to the equal-weight index, reflecting their preference for the growth potential and market dominance of larger companies. Image: Goldman Sachs Global Investment Research
S&P 500 Valuations The composite S&P 500 valuation indicator—which integrates PE ratios, equity risk premia, and price-based mean reversion factors—has recently reset to a level close to neutral, which is an encouraging sign. Image: Topdown Charts