An empirical rather than analytical observation, right?
I think a bit of both.
1. Replacement cost is based on prices of newly produced capital goods. Unlike the prices of existing capital goods, which reflect the changing capitalization of their risk-adjusted expected earnings, among other factors, those of new capital goods are commonly ‘administered’ by their producers in line with normal cost and desired markup. During times of inflation and high interest rates, these administered prices tend to rise.
2. Market capitalization is affected by inflation positively (mainly by boosting expected profit in the numerator), as well as negatively (by increasing the discount rate in the denominator). However, the capitalization formula suggests that the latter (-ve) impact will usually outweigh the former (+ve) impact. For example, all else remaining the same, a 5% increase in expected future profit due to 5% increase in prices, accompanied by a 5 percentage points increase in the discount rate from 3% to 8%, will reduce capitalization by roughly 60%.
Obviously, these are partial back-of-the envelope arguments that invite further research….