Instinctively, I remain skeptical that the recent rally in the equities market will carry us towards new highs soon. My doubts are further reinforced by what I see in the data regarding earnings expectations for the broad market.
The executive summary: the S&P 500’s consensus EPS projections for the next 24 mos are clearly stale. If one assumes a worse-than-2008 drop this year and a sharp rebound in 2021 that doesn’t fully offset the wipe out, the index’s fair value is likely 20% below current levels.
To dig deeper, check out the full article on Seeking Alpha.
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