Many Int’l markets have yet to fully rebound from their 2007 highs – as their economies improve we believe there is room for these markets to get back to those levels.
Int’l Equities appear undervalued to the U.S. on both a P/B and forward P/E basis.
Earnings in the U.S. are at peak levels, while int’l markets aren’t as far along in the cycle and may have more room to run.
After seven years of declining or flat EPS, consensus estimates point towards a rebound in European earnings growth.
Int’l Room to Recover chart: Source: Bloomberg as of 9.30.17. Region values are represented by their respective MSCI Regional Price Index Levels. Percentages are calculated off each indices 2007 month-end highs: Japan (2.28.07), Pacific ex Japan (10.31.07), United Kingdom (10.31.07), Europe ex UK (10.31.07), USA (10.31.07).
Forward EPS chart: Source: Factset as of 9.30.17 Data rebased to 100.
Relative Valuation & Euro Stoxx charts: Source: Factset as of 9.30.17.
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