EFTA Document EFTA01459071

20 November 2015 US Equity Insights 5% delineates healthy from unhealthy S&P EPS growth and supports an 18 PE Our 1 year target of 18x trailing S&P EPS uses a 5.5% real and 7.5% nominal CoE. EPS is retained, so real EPS g must = real CoE - div yld to justify PE = 1/real CoE. [Figure 40: S&P fair valuation & real CoE by sector CearaOwens 2.03 ri 1131 HIS 193 MS 319 la in 04 1117 1q 2)34 211 Cessiflapies 1)» 241 116 '14 155 Al 111% 14» 04 111 24 1111 11? 12tt 00