FirstEnergy Corp.'s (NYSE:FE) P/E Is On The Mark
FirstEnergy Corp.'s (NYSE:FE) P/E Is On The Mark
FirstEnergy Corp.'s (NYSE:FE) price-to-earnings (or "P/E") ratio of 19.2x might make it look like a 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. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
FirstEnergy certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It seems that many are expecting the company to continue defying the broader market adversity, which has increased investors' willingness to pay up for the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.
Want the full picture on analyst estimates for the company? Then our free report on FirstEnergy will help you uncover what's on the horizon.How Is FirstEnergy's Growth Trending?
FirstEnergy's P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market.
Taking a look back first, we see that the company grew earnings per share by an impressive 176% last year. The latest three year period has also seen a 5.4% overall rise in EPS, aided extensively by its short-term performance. Therefore, it's fair to say the earnings growth recently has been respectable for the company.
Turning to the outlook, the next three years should generate growth of 16% per year as estimated by the eleven analysts watching the company. With the market only predicted to deliver 10% per year, the company is positioned for a stronger earnings result.
With this information, we can see why FirstEnergy is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
What We Can Learn From FirstEnergy's P/E?
It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We've established that FirstEnergy 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.
You should always think about risks. Case in point, we've spotted 2 warning signs for FirstEnergy you should be aware of, and 1 of them is potentially serious.
If you're unsure about the strength of FirstEnergy's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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.
第一能源公司's(紐約證券交易所代碼:FE)市盈率(或 “市盈率”)爲19.2倍,與美國市場相比,目前可能看起來像賣出,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。儘管如此,我們需要更深入地挖掘以確定市盈率上升是否有合理的基礎。
FirstEnergy最近確實做得很好,因爲其收益增長是正的,而大多數其他公司的收益卻在倒退。看來許多人預計該公司將繼續克服更廣泛的市場逆境,這增加了投資者購買股票的意願。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
想全面了解分析師對公司的估計嗎?然後,我們關於FirstEnergy的免費報告將幫助您發現即將發生的事情。FirstEnergy的增長趨勢如何?
FirstEnergy的市盈率對於一家有望實現穩健增長且重要的是表現好於市場的公司來說是典型的。
首先回顧一下,我們發現該公司去年的每股收益增長了令人印象深刻的176%。在最近三年期間,每股收益總體增長了5.4%,這在很大程度上得益於其短期表現。因此,可以公平地說,該公司最近的收益增長是可觀的。
展望來看,根據關注該公司的11位分析師的估計,未來三年將實現每年16%的增長。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。
有了這些信息,我們可以明白爲什麼FirstEnergy的市盈率與市場相比如此之高。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FirstEnergy的市盈率中學到什麼?
有人認爲,市盈率是衡量某些行業價值的次要指標,但它可能是一個有力的商業情緒指標。
我們已經確定,FirstEnergy之所以保持高市盈率,是因爲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。
你應該時刻考慮風險。舉個例子,我們發現了兩個你應該注意的FirstEnergy警告信號,其中一個可能很嚴重。
如果您不確定FirstEnergy的業務實力,爲什麼不瀏覽我們的互動式股票清單,其中列出了一些您可能錯過的其他公司,這些股票具有穩健的業務基本面。
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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