S&P 500 Valuation

https://www.marketwatch.com/story/the-average-s-p-500-stock-is-as-overvalued-as-the-magnificent-seven-goldman-says-168d57e7?mod=home-page
The average S&P 500 stock has joined the Magnificent Seven in overvalued territory, according to Goldman Sachs Group.

Since the start of the year, the forward price-to-earnings multiple of the equal-weight S&P 500 index XX:SP500EW has climbed to 17 times forward earnings as more stocks have joined in the rally, according to FactSet data. That’s roughly 13% above Goldman’s estimate of “fair value.”

While this doesn’t necessarily mean the rally that began in October 2022 is nearing its end, high valuations typically lead to weaker returns over the months ahead, according to Goldman’s analysis.

The above would lead one to think:Bubble.
But corporate profits are at all time high. So perhaps valuation of S&P 500 is
just a reflection of that.

7 Likes