PE valuation for European stock markets

Continental European equities have been out performing US and also UK stock markets in last four years. This total returns has been supported by earnings growth. Actually PE ratio is on multiples of 14 times 2007 earnings. Those European markets reached the peak (the highest PE valuation 26) in 1999.

Higher valuation is in mid-cap and small caps. There are still plenty of large caps with very attractive PE ratios. Outlook for earnings remains positive. Based on forward looking statements generally earnings growth is expected to achieve 9.1% for 2007 and 9.3% for 2008.