Australian stocks have managed to buck declines striking much of the region, touching over five-year highs, but the gains could be getting lopsided.
The top-10 industrial stocks are now trading at their most expensive levels since the dot-com boom period, Goldman Sachs said in a note, adding they have typically traded at around 22 times forward earnings on average, compared with their current 28 times.
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The top-10 names, which include consumer names such as Domino's Pizza, Ramsay Health Care and Carsales.com as well as building materials play James Hardie, returned an average of 18 percent over February, Goldman noted.
Their premium to the broader market also expanded from an average of around 50 percent to 80 percent currently, it noted.
"The most striking feature of the reporting season has been the strong multiple expansion witnessed across 'high quality' names," Goldman said, noting revenues have actually disappointed compared with consensus expectations.
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It's a concern for returns ahead, the note said.
"A high starting valuation tends to provide an immediate headwind," Goldman said. "Since 2001, buying Industrial stocks trading on greater than 25 times forward earnings has generated an average return of minus 5 percent over the following 12 months versus an average annual gain of the market of 10 percent."
Others have also noted that the gains have become a bit lopsided.
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Overall market valuations are actually in line with long-term averages, noted Shane Oliver, head of investment strategy at AMP Capital.
"At one end, mining is quite cheap. Industrials have run hard in anticipation of strong earnings growth," he said. "Either earnings pick up or you could see rotation out of industrials and into resources at some stage."
The MSCI Australia index is trading at 14.4 times 12-month forward earnings, above its long-term average of 13.8 times, according to data from Nomura.
The consumer services sector is trading at a 9.6 percent premium to its long-term valuations, while healthcare is at 5.4 percent premium, the data show. But the energy sector is trading at a 7.8 percent discount and materials are only in line with long-term averages, according to the data.
Oliver believes earnings numbers in general looked "strongly positive," based on his forecasts, but much of the profit growth was driven by banks and resources stocks. The consumer discretionary plays, which make up many of the top-10 stocks, may have run ahead of earnings, he said.
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Domino Pizza is trading at around 34.7 times earnings, compared with its 10-year average of 19.9 times, while kitchen appliance maker Breville is at 23.1 times earnings, 84 percent above its 10-year average of 12.5 times, Goldman noted.
"It's a bit of a risk," Oliver added. "You want to be wary of those stocks that have run very hard."
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1