Capital Markets: Observations and Insights Autumn 2019
Additional Insights
INSIGHTS
Smaller Capitalization Stocks Poised to Outperform
• Stronger fundamentals : Small caps are expected to grow much faster than large caps
• Compelling valuation : Small cap P/E multiple premium is low relative to history
• More levered to domestic economy : U.S. small caps have less exposure to international economies
Price-to-Earnings Russell 2000 / Russell 1000
Estimated Earnings Per Share Growth (Next 12-Months Estimate)
0% 10% 20% 30% 40% 50% 60% 70% 80%
23%
8%
Median
Russell 2000
Russell 1000
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Source: FactSet. EPS are consensus estimates and actual earnings per share might be materially different than shown.
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