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FLOOR & DECOR HOLDINGS INC-A has an Investment Rating of HOLD; a target price of $86.000000; an Industry Subrating of Low; a Management Subrating of Low; a Safety Subrating of Medium; a Financial Strength Subrating of Low; a Growth Subrating of Low; and a Value Subrating of High.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

FLOOR & DECOR HOLDINGS INC-A has an Investment Rating of HOLD; a target price of $77.000000; an Industry Subrating of Low; a Management Subrating of Medium; a Safety Subrating of Medium; a Financial Strength Subrating of Low; a Growth Subrating of Medium; and a Value Subrating of High.

Our Stock/Bond Barometer asset-allocation model is indicating that the two major portfolio asset classes are near parity on valuation. The model, which goes back to 1960, takes into account real-time price levels, historical growth rates and forecasts of short- and long-term government and corporate fixed-income yields, inflation, stock prices, GDP, and corporate earnings, among other factors. The output is expressed in standard deviations to the mean, or sigma. The mean reading going back to 1960 is a 0.09 sigma premium for stocks, with a standard deviation of 1.05. In other words, stocks normally sell for a slight premium. The current valuation level now is a 0.05 sigma premium for stocks, down from 0.50 two months ago. Other valuation measures also show reasonable (if not discount) multiples for stocks. The forward P/E ratio for the S&P 500 is approximately 19, the midpoint of the normal range of 15-24. The S&P 500 dividend yield of 1.2% is below the historical average of 2.9%, but the relative reading to the 10-year Treasury bond yield is 30% compared to the long-run average of 39%. Further, the gap between the S&P 500 earnings yield and the benchmark 10-year government bond yield is 371 basis points, compared to the historical average of 400. On price/book, it is no surprise that stocks are priced at the high end of the historical range of 5.0-1.8, given that IT stocks, which have low capital bases, are the biggest component of the market. On price/sales, the current ratio of 2.7 is above the historical average of 1.9, but below the 4.0 multiple at the peak of the dot-com bubble, Lastly, the ratio of the S&P 500 price to an ounce of gold is 1.7, just below the midpoint of the historical range of 1-3. We expect results from our valuation model to continue to tilt toward stocks, as inflation calms, interest rates head lower into 2026, and corporate earnings grow at a double-digit rate. Our recommended asset allocation for growth accounts is 70% growth assets and 30% fixed income.