S&P 500 Valuation Scrutiny Grows as Adjusted Earnings Mask True Costs

On July 13, fresh analysis warned that the S&P 500’s apparent cheapness on forward earnings is misleading, with trailing P/E at 29x on actual net income versus 22x on analyst estimates that exclude recurring items like stock-based compensation. This follows the prior day’s bullish note that the index remains resilient after a 10.3% YTD gain, with Wall Street upgrades focused on AI and biotech names offering 50-65% upside. FactSet projections of $275 2025 and $341 2026 earnings imply 24% growth, yet investors risk overestimating momentum and underestimating valuation risk.