BUZZ-Energy sector fuelling P/E-earnings mismatch in UK midcaps

The divergence between rising valuations and falling earningsforecasts is particularly stretched for UK midcaps.

** Forward P/E for FTSE 250 (15.4 times) highestsince April 2007 while forecast EPS growth for next 12 months(7.5%) is weakest since Oct 2007. http://link.reuters.com/vut38v

** Energy & consumer discretionary sectors biggest culpritswith mean EPS down 5.4% and 2.3% respectively over past month.

** Chart: http://link.reuters.com/jyt38v

** FTSE 250 mean down 1.4% over past month.

** Within the energy sector Cairns Energy forecastgrowth slashed by a fifth, Enquest EPS down 11.6% andEssar Energy down 7.5%.

** Among the consumer discretionary sectors Bwin has had forecast EPS come off 65.5%, Carpetright's mean EPS is down 35.4% & Ite Group is down 6.2%.

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