Global Index Briefing: Europe Auto Components Industry MSCI Yardeni Research, Inc.

November 10, 2015

Dr. Ed Yardeni 516-972-7683 [email protected]

Joe Abbott 732-497-5306 [email protected]

Please visit our sites at www.yardeni.com blog.yardeni.com

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Table Of Contents

Table Of Contents

Europe Auto Components Industry MSCI Stock Price Index Earnings Revenues & Margins Valuation

November 10, 2015 / Global Index Briefing: Europe Auto Components Industry MSCI

1 2 3 4

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Stock Price Index Figure 1. 235 195

235

EUROPE AUTO COMPONENTS INDUSTRY MSCI INDEX (ratio scale)

195 11/9

155

155

115

115

75

75

yardeni.com

35

35

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 200-day moving average. Source: Morgan Stanley Capital International.

Figure 2. 325

325

EUROPE AUTO COMPONENTS INDUSTRY MSCI, FORWARD EARNINGS, & VALUATION

300

300

Europe Auto Components Industry MSCI Index 11/09/15

275

275 x9

Blue Angels Implied Price Index* 10/29/15

250

250

225

225

200

200 x6

175

175

150

150

125

125

100

100 x3

75

75

50

50

25

25 yardeni.com

0 2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

0

2017

* Implied price index calculated using forward earnings times forward P/Es. Source: Morgan Stanley Capital International and Thomson Reuters I/B/E/S.

Page 1 / November 10, 2015 / Global Index Briefing: Europe Auto Components Industry MSCI

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Earnings Figure 3. 44 39

44

EUROPE AUTO COMPONENTS INDUSTRY MSCI EARNINGS PER SHARE (analysts’ average forecasts, ratio scale)

34

15

39

16

34

17

Consensus Forecasts

29

10/29

Annual estimates

24

29 24

Forward earnings*

19

19

14

14

9

9

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4

4

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 * Time-weighted average of the consensus estimates for current and next year. Monthly through December 2005, weekly thereafter. Source: Thomson Reuters I/B/E/S.

Figure 4. 60

60

EUROPE AUTO COMPONENTS INDUSTRY MSCI INDEX NET EARNINGS REVISIONS*

40

40

20

20

0

0

Oct

-20

-40

NERI Aug -8.3 Sep -13.2 Oct -18.2

-60

-20

-40

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-60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of estimates. Source: Thomson Reuters I/B/E/S.

Page 2 / November 10, 2015 / Global Index Briefing: Europe Auto Components Industry MSCI

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Revenues & Margins Figure 5. 550

550

EUROPE AUTO COMPONENTS INDUSTRY MSCI REVENUES PER SHARE (analysts’ average forecasts, ratio scale)

500

Consensus Forecasts Annual estimates

450

500

16 17

15

Forward revenues*

450 10/29

400

400

350

350

300

300

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250 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

250

2017

* Time-weighted average of the consensus estimates for current and next year. Monthly through December 2005, weekly thereafter. Source: Thomson Reuters I/B/E/S.

Figure 6. 9

9

EUROPE AUTO COMPONENTS INDUSTRY MSCI PROFIT MARGIN (using analysts’ average earnings and revenues forecasts)

8

8 15

16

7

17

7

10/29

6

6

5

5

4

4

Consensus Forecasts

3

3

Annual estimates Forward profit margin* (6.8)

2

2 yardeni.com

1 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

1

2017

* Time-weighted average of the consensus estimates for current and next year. Monthly through December 2005, weekly thereafter. Source: Thomson Reuters I/B/E/S.

Page 3 / November 10, 2015 / Global Index Briefing: Europe Auto Components Industry MSCI

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Valuation Figure 7. 30

30

EUROPE AUTO COMPONENTS INDUSTRY MSCI VALUATION MULTIPLE*

25

25

Forward P/E (12.5) 20

20

15

15 10/29

10

10

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5

5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 * Price divided by forward consensus expected earnings per share. Monthly data through December 2005, weekly thereafter. Source: Thomson Reuters I/B/E/S.

Figure 8. 2.00

2.00

EUROPE AUTO COMPONENTS INDUSTRY MSCI RELATIVE VALUATION*

1.75

1.50

1.75

Relative P/E (0.81)

1.50

1.25

1.25

1.00

1.00 10/29

.75

.75

.50

.50

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.25

.25

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 * Forward P/E of index relative to All Country World MSCI forward P/E. Monthly data through December 2005, weekly thereafter. Source: Thomson Reuters I/B/E/S.

Page 4 / November 10, 2015 / Global Index Briefing: Europe Auto Components Industry MSCI

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