Most CFOs think the US market is overvalued

Most CFOs think the US market is overvalued

September 24, 2015 Chart of the Day
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According to the latest Global Business Outlook survey jointly conducted by Duke University and CFO magazine, 55% of U.S. companies say they think the stock market is overvalued, while only 6% of them think the stock market is undervalued.

More than 1,200 CFOs, including 510 from the U.S., participated in this recent quarterly survey. The survey questions cover five main parts: Business Optimism, CFO top concerns, Employment and wages, stock market valuation, and risk management concerns. (Click to download: CFOsurveyOverview_2015Q3 Final)

CFOs are very bearish on the U.S. market,” said Fuqua professor Campbell R. Harvey, a founding director of the survey. “Our survey took place during a volatile time where there was a 10 percent market correction. Even after this drawdown, 55 percent of CFOs thought the market was overvalued. source.

is the stock market overvalued or undervalued_CFO Suvey overview 2015Q3
screenshot from the 2015Q3 Global Busines Outlook summary.

Here are some stats on various metrics from 510 U.S. firms.

  • CFOs’ expected earnings growth in next 12 months is 3.0%, down from 11.7% last year.
  • CFOs’ expected revenue growth in the next 12 months is 3.5%, down from 7.3% last year.
earnings and revenue growth
**The survey has been conducted every quarter since July 1996. An archive of past surveys is available under the “Past Results” tab athttp://www.cfosurvey.org.

Not a lot of bulls in CFO land…

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About the Author

Wesley R. Gray, Ph.D.

After serving as a Captain in the United States Marine Corps, Dr. Gray received a PhD, and was a finance professor at Drexel University. Dr. Gray’s interest in entrepreneurship and behavioral finance led him to found Alpha Architect. Dr. Gray has published three books: EMBEDDED: A Marine Corps Adviser Inside the Iraqi Army, QUANTITATIVE VALUE: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors, and DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth. His numerous published works has been highlighted on CBNC, CNN, NPR, Motley Fool, WSJ Market Watch, CFA Institute, Institutional Investor, and CBS News. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.