Sector P / E Ratios

July 10, 2008

Hickey and Walters (Bespoke) submit:

Many market participants continue to stress that estimated valuations for the market remains low, making equities attractive. The problem is that these are estimates, and until the actual earnings come through, it’s hard to go by analyst expectations, especially in this market environment.

While estimated valuations might be low, the trailing 12-month P/E ratio for the S&P 500 is not. As shown below, the trailing P/E for the index is currently at 20.54, and just a couple of weeks ago, it had risen to its highest levels in years. Even at 20.54, it is higher than it was when the market peaked in October.

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