Using a triangulation of three value philosophies, viz.: mean reversion, P/E model, dividend discount model, analysts at Goldman Sachs peg the fair value of the MSCI EM at 882, translating into a 6% upside potential.
Caesar Maasry and colleagues at Goldman Sachs in their October 9, 2015 research report titled: “EM Valuation Triangulation” remain focused on identifying a stabilization in the emerging markets growth cycle before turning more positive.
MSCI EM valuation triangulation
Maasry et al. point out that EM assets have been under pressure for almost five years, with MSCI EM touching a peak on May 2, 2011. The analysts note since April 2015, MSCI EM has dropped 25% and investor focus has shifted to the question of downside support...
