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Saturday, 13 June 2020

Stock valuations hit new record

Earnings decline

Damien Klassen at Nucleus takes a look at the outlook for company earnings, which are likely to drop and then, he argues, struggle to recover over the next 3 to 5 years.

With the earnings of Australia's largest businesses expected to decline ahead the forward PE is now at a fresh all-time high of ~21:

Source: Nucleus Wealth

See here for his article (or click on the image above).

Annual earnings can be volatile, of course, hence some have a preference for using smoothed average indicators.