Europe Equities
Today’s price sits at the 54.7th percentile of modeled fair value — 46% of modeled scenarios put fair value above the market.
- Median fair value
- 97.7
- Upside to median
- -2.3%
- Last close
- $87.85
- Confidence
- moderate-high
Return distributions, not point forecasts
Percentiles describe the spread of scenario outcomes under the stated method. The width of the range carries as much information as the midpoint.
One year
modeled- P90
- +24.5%
- P75
- +16.0%
- Median
- +7.5%
- P25
- -1.5%
- P10
- -14.0%
64% of modeled scenarios end positive.
Dividend yield of roughly 3.0% plus sustainable earnings growth of about 5.5% after haircutting the 23% implied one-year jump embedded in the trailing-to-forward multiple gap, less 25% of the modeled -2.3% fair-value gap converging within the year. Returns are unhedged, so euro and sterling exposure widens the quantiles. The scenario-implied beat probability is diagnostic only and is read against the 4.58% one-year Treasury par hurdle.
Three years, annualised
modeled- P90
- +14.0%
- P75
- +10.5%
- Median
- +6.5%
- P25
- +2.5%
- P10
- -2.0%
Three-year explicit model: dividend yield, nominal earnings growth partially normalized toward euro-area nominal GDP, and the modeled fair-value gap closing over three years at a terminal forward multiple within the 14x to 16x range, discounted at the one-year Treasury hurdle plus a 5.0% European equity risk premium.
Against the Treasury hurdle
- 1y Treasury
- 4.58%
- Expected excess
- +2.9%
- Basis
- proxy
The 4.58% one-year Treasury par yield is a dollar hurdle while the benchmark carries unhedged euro, sterling and Swiss franc exposure, so the modeled 2.92 percentage point edge is a proxy comparison. Euro-area policy rates are not supplied, so the local discount-rate channel is expressed as a required risk premium over US rates rather than measured directly.
6 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| EWG Germany Index | +0.3Fair | 101.0 | $41.90 | +8.3% |
| EWL Switzerland Index | -0.8Somewhat expensive | 95.0 | $59.97 | +6.8% |
| EWQ France Index | +0.4Somewhat cheap | 101.5 | $43.27 | +8.5% |
| EWU United Kingdom Index | +1.1Somewhat cheap | 105.0 | $46.85 | +9.3% |
| EZU Eurozone Equity Index | +0.1Fair | 99.5 | $68.23 | +7.9% |
| VGK Europe Broad Market | -0.3Fair | 97.7 | $87.85 | +7.5% |