S&P Dow Jones Indices relabels growth and value December 21
Big update coming to the stock market: S&P Dow Jones Indices will change how it labels "growth" and "value" stocks starting December 21, 2026.
Growth stocks will no longer be judged by their share price momentum, while value stocks will now factor in free cash flow-to-price ratio for most sectors, excluding real estate, banks, insurance, and certain financial services industries.
These changes impact the S&P 500 Growth and S&P 500 Value, along with corresponding mid-cap and small-cap indices.
Growth momentum removed, value metrics expanded
Right now, growth stocks get scored on earnings per share, sales growth, and price momentum, but soon, momentum is out of the equation.
For value stocks, there will be tweaks too: book value-to-price ratios will account for intangible assets, plus a mix of past and future earnings-to-price ratios gets added.
Free cash flow joins the mix for most sectors, excluding real estate, banks, insurance, and certain financial services industries.