I've recently found this web page, listing the average P/E Ratios of main stock markets:
Here I reproduce just a small extract:
- INDEX - Country - Trailing PER - Forward PER
- CAC40 - France - 24.3 - 13.2
- IBEX35 - Spain - 21.4 - 12.7
- NASDAQ - US - 34.5 - 18
I've noticed two things:
- Most trailing P/E ratios are quite high: I understand that 'normal' values should be in the range of 16 - 20.
- There is a very big difference between trailing P/R and forward P/R. I understand that trailing is calculated using the actual earnings of past year, and forward is calculated with the companies' annual forecasts.
Am I right concluding that:
- Stock markets are probably over-evaluated, considering the earnings in 2016?
- Stock markets are possibly over-optimistic regarding the earnings in 2017?
[Edit: I've corrected my conclusions after answer from Klas Lindbäck, to avoid expressing too strongly my personal concerns about the earnings of companies in 2017]