Friday, September 28, 2012

PE Multiple Expansion of Largest S&P 500 Companies

The S&P 500 is up 15% year to date, but earnings are forecast to grow 3-5% this year, which mathematically means that we've experienced some multiple expansion during 2012.  Below is a chart highlighting the multiple expansion for the 10 largest S&P 500 companies so far this year.  Of the 10 largest companies in the S&P 500 (to start the year) only one, XOM, has seen multiple contraction on a TTM basis.

The average P/E multiple of these 10 companies has expanded from 14 to 16 during 2012.

PE Multiple Largest Companies

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