Grinold–Kroner model

CFA Level III
#1

Could someone please explain the intuition why Grinold–Kroner model include Delta P/E (or simply expected repricing return) in the formula:

GK= Div(1)/P + i + g - Delta S + Delta P/E

I understand all other components of the Grinold–Kroner model except this one!

#2

The model estimates the return on a stock. If the P/E ratio changes (and earnings are unchanged), the stock’s price changes, which is a component of return.

I wrote an article on this that may be of some help: http://financialexamhelp123.com/grinold-kroner-model/

#3

Repricing return. Stock sometimes misprice (undervalued or overvalued) which should coverage to long term average P/E.