Capital Markets: Observations & Insights

Growth Valuations Are Reasonable ​ Valuation

• Despite their recent outperformance, Growth stocks remain attractively valued compared to Value stocks, relative to history and their respective growth rates

Russell 1000 Growth vs. Russell 1000 Value PEG Ratio (P/E Divided by Long-Term Growth Rate)

Russell 1000 Growth vs. Russell 1000 Value P/E

30% premium is low relative to history

1.7x

1.5x

Russell 1000 Value

Russell 1000 Growth

Source: FactSet, Bank of America as of 12/31/17.

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