Coronavirus-led panic drives equity PE ratios down to 2012 levels

With global equities having lost up to 36% in performance since their peak on February 19, what does this mean for equity market valuations? The latest 12-month forward PE ratios show that the US has returned to levels last seen during the 2018 correction, while those of other markets have reached valuations close to 2012 levels.

There is a clear risk, however, that equity markets could be on the cusp on a “value trap” as the “E” in the PE still needs to be adjusted.

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