Originally posted on August 20, 2020
By Philip Lawlor, head of Global Investment Research
Forward PE multiples hit new decade highs in August amid buoyant risk appetite and recovery hopes for both economies and corporate earnings. History offers some perspective on how best to interpret this move.
PE multiples across markets have not only surpassed their pre-COVID-19 levels of early February but are also at or above their 10-year highs. As the chart below shows, the run-up in the Russell 1000 multiple since March has been most pronounced. At a forward PE of 22.9×, the