The S&P 500's forward price-to-earnings ratio falls below its five-year average. Analysts use this ratio to assess stock valuation and earnings expectations for the next year.
WALL STREET — The S&P 500's forward price-to-earnings ratio fell below its five-year average on March 24, 2026, marking the first time in a year that the metric dropped below this benchmark.
Wall Street analysts typically use the forward price-to-earnings ratio to determine whether a company's stock is cheap or expensive. The forward price-to-earnings ratio compares a company's stock price with analysts' expectations for the firm's earnings over the next 12 months.
The S&P 500’s forward price-to-earnings ratio is back below its five-year average.
For the first time in a year, shares of the biggest U.S. companies appear inexpensive.
Wall Street analysts typically use the forward price-to-earnings ratio to determine whether a company's stock is cheap or expensive.
The forward price-to-earnings ratio compares a company's stock price with analysts' expectations for the firm's earnings over the next 12 months.
The article was published on March 24, 2026, at 5:18 p.m. ET.
Joseph Adinolfi is a markets reporter at MarketWatch.
Isabel Wang is a markets reporter at MarketWatch.
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