Bloomberg Surveillance · Thursday, September 24, 2026
An analyst suggests that current earnings are cyclically elevated, with 2027 EPS expected to be 42% above the cyclically adjusted EPS. This elevated earning level, coupled with a 5% interest rate environment, implies lower multiples going forward and argues against current high equity valuations.
“Our view is that earnings are elevated. Everyone's over-earning right now. If you look at the 10-year EPS cycle, by next year, we're going to have one of the strongest 10-year EPS cycles in history.”
“2027 EPS is expected to be about 42% above the cyclically adjusted EPS based on our calculation.”
“So, you know, everything that we're seeing is showing that earnings are likely cyclically elevated, which argues for lower multiples going forward.”