Will earnings growth finally come through for Europe?

Will earnings growth finally come through for Europe?

Using exclusive data from Morningstar, Investment Week analyses the prospects for earnings growth in Europe, how the asset class compares to its global peers, and how fund flows have made investors in the region more risk averse.

  How do European equity valuations compare?  In relation to their US counterparts, European equities seem cheap. However, according to data from Morningstar, the asset class is still one of the most expensive globally. On a price-to-earnings ratio, the Morningstar Developed Europe ex-UK index is just behind the S&P 500 in terms of value, at 17x earnings, versus the US, which is at 18x earnings (see chart 1). The Europe ex-UK index comes ahead of Japan, Asia, and emerging market indices, which are all, on both a price-to-book ratio and a price-to-cash ratio, less expensive tha...