Some Shareholders Feeling Restless Over Albany International Corp.'s (NYSE:AIN) P/E Ratio
Some Shareholders Feeling Restless Over Albany International Corp.'s (NYSE:AIN) P/E Ratio
When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 16x, you may consider Albany International Corp. (NYSE:AIN) as a stock to avoid entirely with its 24.7x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
Recent times have been pleasing for Albany International as its earnings have risen in spite of the market's earnings going into reverse. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. 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 Albany International will help you uncover what's on the horizon.Does Growth Match The High P/E?
There's an inherent assumption that a company should far outperform the market for P/E ratios like Albany International's to be considered reasonable.
Retrospectively, the last year delivered an exceptional 17% gain to the company's bottom line. EPS has also lifted 17% in aggregate from three years ago, mostly thanks to the last 12 months of growth. Therefore, it's fair to say the earnings growth recently has been respectable for the company.
Turning to the outlook, the next year should generate growth of 7.8% as estimated by the five analysts watching the company. With the market predicted to deliver 11% growth , the company is positioned for a weaker earnings result.
With this information, we find it concerning that Albany International is trading at a P/E higher than the market. Apparently many investors in the company are way more bullish than analysts indicate and aren't willing to let go of their stock at any price. Only the boldest would assume these prices are sustainable as this level of earnings growth is likely to weigh heavily on the share price eventually.
The Final Word
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.
Our examination of Albany International's analyst forecasts revealed that its inferior earnings outlook isn't impacting its high P/E anywhere near as much as we would have predicted. Right now we are increasingly uncomfortable with the high P/E as the predicted future earnings aren't likely to support such positive sentiment for long. This places shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
A lot of potential risks can sit within a company's balance sheet. Take a look at our free balance sheet analysis for Albany International with six simple checks on some of these key factors.
Of course, you might also be able to find a better stock than Albany International. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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.
當將近一半的美國公司的市盈率(或 “市盈率”)低於16倍時,你可以將奧爾巴尼國際公司(紐約證券交易所代碼:AIN)視爲股票,以其24.7倍的市盈率完全避免。儘管如此,我們需要更深入地挖掘,以確定市盈率大幅上漲是否有合理的基礎。
最近令奧爾巴尼國際感到高興,儘管市場收益出現逆轉,但其收益卻有所增加。市盈率可能很高,因爲投資者認爲該公司將繼續比大多數人更好地應對更廣泛的市場阻力。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,我們關於奧爾巴尼國際的免費報告將幫助您發現即將發生的事情。增長與高市盈率相匹配嗎?
人們固有的假設是,如果像奧爾巴尼國際這樣的市盈率才算合理,公司的表現應該遠遠超過市場。
回顧過去,去年的公司利潤實現了17%的驚人增長。每股收益也比三年前增長了17%,這主要歸功於過去12個月的增長。因此,可以公平地說,該公司最近的收益增長是可觀的。
談到前景,根據關注該公司的五位分析師的估計,明年將實現7.8%的增長。預計市場將實現11%的增長,該公司的盈利業績將疲軟。
有了這些信息,我們發現奧爾巴尼國際的市盈率高於市場。顯然,該公司的許多投資者比分析師所表示的要看漲得多,他們不願意以任何價格拋售股票。只有最大膽的人才會假設這些價格是可持續的,因爲這種收益增長水平最終可能會嚴重壓制股價。
最後一句話
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。
我們對奧爾巴尼國際分析師預測的審查顯示,其較差的盈利前景對其高市盈率的影響沒有我們預期的那麼大。目前,我們對高市盈率越來越不滿意,因爲預期的未來收益不太可能長期支撐這種積極情緒。這使股東的投資面臨重大風險,潛在投資者面臨支付過高溢價的危險。
公司的資產負債表中可能存在許多潛在風險。看看我們對奧爾巴尼國際的免費資產負債表分析,其中對其中一些關鍵因素進行了六項簡單檢查。
當然,你也可以找到比奧爾巴尼國際更好的股票。因此,你不妨免費查看其他市盈率合理且收益強勁增長的公司。
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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