Dr. David Kelly, CFA - J.P. Morgan

[Pages:71]Americas

Europe

Asia

David Lebovitz New York

Jordan Jackson New York

Dr. David Kelly, CFA New York

Karen Ward London

Tai Hui Hong Kong

Gabriela Santos New York

Jack Manley New York

Michael Bell, CFA London

Vincent Juvyns Luxembourg

Hugh Gimber, CFA London

Tilmann Galler, CFA Frankfurt

Marcella Chow Hong Kong

Ian Hui Hong Kong

Chaoping Zhu, CFA Shanghai

Meera Pandit, CFA New York

Stephanie Aliaga New York

Olivia Schubert New York

Nimish Vyas New York

Ambrose Crofton, CFA London

Jai Malhi, CFA London

Maria Paola Toschi Milan

Elena Domecq Madrid

Adrian Tong Hong Kong

Sahil Gauba Mumbai

Max McKechnie London

Lucia Gutierrez Mellado Madrid

Clara Cheong Singapore

Shogo Maekawa Tokyo

Agnes Lin Taipei

Kerry Craig, CFA Melbourne

S&P 500 Price Index

4,800

4,500 4,200

Characteristic Index Level P/E Ratio (fwd.)

3,900

Dividend Yield

3,600

10-yr. Treasury

3/24/2000 10/9/2007 2/19/2020

1,527

1,565

3,386

25.2x

15.1x

19.2x

1.4%

1.9%

1.9%

6.2%

4.7%

1.6%

1/7/2022 4,677 20.5x 1.4% 1.8%

3,300

Jan. 07, 2022 P/E (fwd.) = 20.5x

4,677

+109%

Feb. 19, 2020 P/E (fwd.) = 19.2x

3,386

3,000

2,700

2,400

+401%

-34%

2,100 1,800

Mar. 24, 2000 P/E (fwd.) = 25.2x

1,527

Oct. 9, 2007 P/E (fwd.) = 15.1x

1,565

Mar. 23, 2020 P/E (fwd.) = 13.3x

2,237

1,500

Oct. 9, 2002

1,200 900

+106%

P/E (fwd.) = 14.1x

777

-49%

Dec. 31, 1996

+101%

-57%

Mar. 9, 2009

P/E (fwd.) = 15.9x

P/E (fwd.) = 10.4x

600

741

677

'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

S&P 500 Index: Forward P/E ratio

28x 26x 24x 22x 20x

Valuation measure

Description

Latest 25-year avg.*

P/E CAPE Div. Yield P/B P/CF EY Spread

Forward P/E

20.47x

Shiller's P/E

38.58

Dividend yield 1.38%

Price to book

4.31

Price to cash flow 15.71

EY minus Baa yield 1.38%

16.82x 27.95 2.00% 3.09 11.13 0.17%

Std. dev. Over/under-Valued

1.09 1.66 1.88 1.51 2.08 -0.60

+1 Std. dev.: 20.17x

18x

16x

14x

-1 Std. dev.: 13.48x

25-year average: 16.82x

12x

10x

8x

'97

'99

'01

'03

'05

'07

'09

'11

'13

'15

'17

Jan. 07, 2022: 20.47x

'19

'21

Forward P/E and subsequent 1-yr. returns

S&P 500 Total Return Index 60%

Jan. 07, 2022: 20.5x

40%

20%

Forward P/E and subsequent 5-yr. annualized returns

S&P 500 Total Return Index 60%

40% 20%

Jan. 07, 2022: 20.5x

0%

0%

-20%

-20%

-40%

-40%

-60% 8.0x

11.0x

14.0x

R? = 3%

17.0x

20.0x

23.0x

-60%

26.0x

8.0x

11.0x

14.0x

R? = 39%

17.0x

20.0x

23.0x

26.0x

S&P 500 earnings per share

Index annual operating earnings

$275

$250

$225 $200

Consensus analyst estimates Earnings recessions

$175

$150

$125

$100

$75

$50

$25

$0 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21

Percent change in S&P 500, earnings and valuations Year-to-date, indexed to 100

145

Share of return

2021

Earnings Growth

34.5%

135

Multiple growth

-7.6%

S&P 500 price return

26.9%

125

115

105

95

85 Dec '20

Feb '21

Apr '21

Jun '21

Aug '21

Oct '21

Dec '21

S&P 500 year-over-year operating EPS growth Annual growth broken into revenue, changes in profit margin & changes in share count

100% 80% 60%

Share of EPS growth 2021* Avg. '01-20

Margin

55.2% 2.8%

Revenue

16.6% 3.0%

Share count

-0.6% 0.3%

Total EPS

71.3% 6.0%

47%

40% 20%

0%

24%

19% 19%

13% 15%

15%

15%

11%

5%

0%

22% 17%

6%

4%

2021* 71%

-20% -40% -31%

-6% -40%

-11%

-22%

-60% '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

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

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

Google Online Preview   Download