How justified are the record PE spreads in equity markets
Forward-looking aggregate equity market valuations, at least in Europe, still don't look excessive. However, under the hood, parts of the universe have experienced massive multiples expansion and are now more expensive than during the Dotcom bubble. At the same time, the cheaper stocks are as cheap as ever. Our study shows that this phenomenon is more broad-based than anecdotal evidence indicates, and we find it increasingly concerning.