Euro Stoxx 50 NTM P/E at a 25% discount to S&P500 -- near 3-year lows
Sep 04, 2018
- The NTM P/E for the Euro Stoxx 50 is trading at a 25% discount to the NTM P/E of the S&P500.
- At 0.75x, the ratio is near a 3-year low and at levels not seen since mid-CY2016.
- For the year, the S&P 500 Total Return Index is +9.94% as of Friday, August 31. In comparison, the total return for the Euro Stoxx 50 is -4.18% (in USD$) as of yesterday’s close (September 4) in Europe.
- Over the next 12-months, earnings are expected to grow +22.37% for the S&P500 while consensus expects +8.54% earnings growth for the Euro Stoxx 50. In PEG terms, the S&P500 NTM P/E implies a discount to growth while the Euro Stoxx is at a premium to growth.
- While the Euro Stoxx 50 appears to be cheap vs. the S&P500 on a NTM P/E basis, however, growth adjusted it is much more expensive.
Food for thought for those arguing European stocks are cheap.