Several days ago we showed
something remarkable:
“current forward 12-month P/E ratio for the Energy sector is now well
above the three most recent historical averages: 5-year (12.0), 10-year
(11.9), and 15-year (13.6). In fact, this week marked the first time the
forward 12-month P/E for the Energy sector has been equal to (or above)
22.4 since April 8, 2002. On that date, the closing price of the Energy
sector was 225.15 and the forward 12-month EPS estimate was $10.05.”
Further refining this analysis and using the S&P Energy Sector Index data, the sector’s forward multiple is
now an absolutely ridiculous, mindblowing 23x,
the highest since 2002, having soared by nearly 100% in just the past
few months as a result of collapsing energy sector earnings.
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