Morgan Stanley Stock-Valuation Call at Odds With Goldman Sachs
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Forecasts for stock-market performance tend to pile up faster than snow in Buffalo at this time of year, and among the blizzard it’s notable that two of the highest-profile prognosticators disagree on one fundamental issue: valuations.
The price-to-earnings ratio of the Standard & Poor’s 500 Index has steadily increased for more than three years. It’s risen 54 percent since October 2011 to 18.3 times reported earnings, according to data compiled by Bloomberg, and 58 percent to 16.1 when looking at estimated earnings for the following 12 months.