Markets are like teenagers — temperamental and easily bored. They love a “new thing”. This year’s equity markets have seen most stock prices fall, but a tiny number rise impressively — mainly the technology companies that dominate the global index. The valuation of some of these companies is now far removed from that of other stocks. Take, for example, Apple, which alone represents 5.2 per cent of the global index .
But growing price competition from Chinese automakers and, increasingly, from major players in Japan and Germany means its earnings are expected to fall, leaving it on a PE over 70x, which seems flighty. Lastly, Meta — the company formerly known as Facebook. Its share price is up 162 per cent this year. Retreating a little perhaps from its metaverse enthusiasm, its sales should grow over 14 per cent and earnings by more than 30 per cent, leaving it on a PE of only 22x.
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Source: LBC - 🏆 17. / 74 Read more »
Source: FT - 🏆 113. / 51 Read more »