EnLink Midstream, LLC's (NYSE:ENLC) Price In Tune With Earnings
EnLink Midstream, LLC's (NYSE:ENLC) Price In Tune With Earnings
EnLink Midstream, LLC's (NYSE:ENLC) price-to-earnings (or "P/E") ratio of 29.6x might make it look like a strong sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 16x and even P/E's below 9x are quite common. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.
EnLink Midstream has been struggling lately as its earnings have declined faster than most other companies. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. If not, then existing shareholders may be very nervous about the viability of the share price.
Keen to find out how analysts think EnLink Midstream's future stacks up against the industry? In that case, our free report is a great place to start.Does Growth Match The High P/E?
The only time you'd be truly comfortable seeing a P/E as steep as EnLink Midstream's is when the company's growth is on track to outshine the market decidedly.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 41%. This has erased any of its gains during the last three years, with practically no change in EPS being achieved in total. Therefore, it's fair to say that earnings growth has been inconsistent recently for the company.
Looking ahead now, EPS is anticipated to climb by 23% per annum during the coming three years according to the four analysts following the company. With the market only predicted to deliver 10% each year, the company is positioned for a stronger earnings result.
In light of this, it's understandable that EnLink Midstream's P/E sits above the majority of other companies. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From EnLink Midstream's P/E?
Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that EnLink Midstream maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
Plus, you should also learn about these 3 warning signs we've spotted with EnLink Midstream (including 1 which is significant).
If these risks are making you reconsider your opinion on EnLink Midstream, explore our interactive list of high quality stocks to get an idea of what else is out there.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
與美國市場相比,EnLink Midstream, LLC(紐約證券交易所代碼:ENLC)的市盈率(或 “市盈率”)爲29.6倍,這可能使其看起來像是強勁的拋售,美國約有一半的公司的市盈率低於16倍,甚至市盈率低於9倍也很常見。但是,市盈率可能相當高是有原因的,需要進一步調查以確定其是否合理。
由於其收益的下降速度快於大多數其他公司,EnLink Midstream最近一直處於困境。一種可能性是市盈率居高不下,因爲投資者認爲該公司將徹底扭轉局面,加速超越市場上的大多數其他公司。如果不是,那麼現有股東可能會對股價的可行性感到非常擔憂。
想了解分析師如何看待EnLink Midstream的未來與該行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。增長與高市盈率相匹配嗎?
你唯一能真正放心地看到像EnLink Midstream一樣高的市盈率是公司的增長有望在市場上大放異彩的時候。
首先回顧一下,該公司去年的每股收益增長並不令人興奮,因爲它公佈了令人失望的41%的跌幅。這抹去了其在過去三年中的任何收益,總體每股收益幾乎沒有變化。因此,可以公平地說,該公司最近的收益增長一直不穩定。
根據關注該公司的四位分析師的說法,展望未來,預計未來三年每股收益將每年增長23%。由於預計市場每年僅增長10%,該公司有望實現更強勁的盈利業績。
有鑑於此,EnLink Midstream的市盈率高於其他大多數公司是可以理解的。看來大多數投資者都在期待這種強勁的未來增長,並願意爲該股支付更多費用。
我們可以從EnLink Midstream的市盈率中學到什麼?
通常,在做出投資決策時,我們會謹慎行事,不要過多地閱讀市盈率,儘管這可以充分揭示其他市場參與者對公司的看法。
我們已經確定,EnLink Midstream保持了較高的市盈率,原因是其預測的增長將高於整個市場,正如預期的那樣。在現階段,投資者認爲,收益惡化的可能性不足以證明降低市盈率是合理的。除非這些條件發生變化,否則它們將繼續爲股價提供強有力的支撐。
另外,你還應該了解我們在EnLink Midstream中發現的這3個警告信號(包括一個重要的警告信號)。
如果這些風險讓你重新考慮你對EnLink Midstream的看法,請瀏覽我們的高質量股票互動清單,了解還有什麼。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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