Performance analysis for the 4th quarter of 2023 and outlook until the 4th quarter of 2024 | decision point

Here are the S&P 500’s fourth quarter 2023 earnings: The valuation analysis is as follows:

The following chart shows the normal value range for the S&P 500 Index. This indicates where the S&P 500 should be. overrated P/E 20 (red line), quite valuable P/E 15 (blue line) or underrated P/E is 10 (green line). The annotation to the right of the chart shows where the range is expected to be based on revenue estimates from: 4th quarter 2024.

Historically, prices have typically remained below the upper end of their normal value range (red line). However, since about 1998, it has not been uncommon for prices to exceed normal levels of overvaluation, sometimes well above. Most of the market overrated Since 1992, it hasn’t happened. underrated Since 1984. We might say this is the “new normal,” but it’s not. normal Follows Generally Accepted Accounting Principles (GAAP) standards.

We use GAAP earnings as the basis for our analysis. The table below shows revenue projections through 2012. December 2024. P/E estimates are calculated based on the current S&P 500 closing price. December 29, 2023. It will change daily depending on where the market goes from here. It is noticeable that PER is outside the normal range.

The following table shows where the bands are expected to be based on revenue estimates through the fourth quarter of 2024.

This DecisionPoint chart tracks S&P 500 fundamentals, P/E, and returns and is updated daily. You don’t need to watch it closely, but it will be updated whenever you need it.

conclusion: The market is still very overvalued and the P/E is still above its normal range. Revenues continue to grow, are trending upward and are expected to rise further by the end of the year. While overvaluation does not necessarily require an immediate decline to bring valuations back to a normal range, high valuations do put negative pressure on the market environment.

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