Report
What should the level of European equities’ PER be?
The Euro Stoxx PER calculated on 2020 earnings is currently 14.6. We seek to determine what it should be, considering: The outlook for long-term interest rates; The growth outlook; The normal level of the risk premium given the level of risk in the euro zone currently. We arrive at a value of 27 (!), markedly higher than the actual value (14.6) because of the very low level of long-term interest rates. This shows the low valuation of European equities given the fundamentals.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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