In today’s briefing:
- Higher P/E Is Driver for This Stock Rally. Profit Growth Is Necessary for Further Stock Rally
Higher P/E Is Driver for This Stock Rally. Profit Growth Is Necessary for Further Stock Rally
- Despite disclosing “improvement measures,” many companies have yet to see their stock prices rise sufficiently, which is one reason why an increasing number of companies announce enhanced shareholder returns.
- 2003 and 2013 were the starting point for monetary easing and excess liquidity helped raise P/B. Whether BOJ will head for the exit or continue easing is a major factor.
- Since this stock price rally was brought about by an increase in P/E multiples, further stock price appreciation will require continued profit growth, i.e., an increase in ROE.
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