Goldman releases a very bearish note on the outlook for the S&P, saying the index is overvalued by almost any measure and the forward path will depend on...

Goldman releases a very bearish note on the outlook for the S&P, saying the index is overvalued by almost any measure and the forward path will depend on profit growth rather than P/E expansion. The current valuation of the S&P 500 is lofty by almost any measure, both for the aggregate market as well as the median stock: (1) The P/E ratio; (2) the current P/E expansion cycle; (3) EV/Sales; (4) EV/EBITDA; (5) Free Cash Flow yield; (6) Price/Book as well as the ROE and P/B relationship; and compared with the levels of (6) inflation; (7) nominal 10-year Treasury yields; and (8) real interest rates. Furthermore, the cyclically-adjusted P/E ratio suggests the S&P 500 is currently 30% overvalued in terms of (9) Operating EPS and (10) about 45% overvalued using As Reported earnings. (VIEW LINK)