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JPMorgan Strategists Say S&P 500 Valuations Are Still Attractive

  • Stocks better than fairly valued on higher quality firms: JPM
  • Don’t expect negative y/y EPS growth outside of deep recession

US stock market valuations look attractive given low bond yields and the presence of higher quality companies in the S&P 500, according to JPMorgan Chase & Co. strategists.

The US benchmark is on course for its biggest monthly gain since October, lifting the forward 12-month price-to-earnings ratio to 16.9 from a low of 15.3 reached in June. Still, that’s in line with the long-term median and “in our view is still cheap considering low bond yields,” strategists led by Dubravko Lakos-Bujas wrote in a note on July 28.