price-earnings ratio

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price-earn·ings ratio

The ratio of the market price of a common stock to its earnings per share.

price-earnings ratio

(Stock Exchange) the ratio of the price of a share on a stock exchange to the earnings per share, used as a measure of a company's future profitability. Abbreviation: P/E ratio

price′-earn′ings ra`tio

the current price of a share of common stock divided by earnings per share over a 12-month period, often used in stock evaluation. Abbr.: p/e
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He also states that given how price earnings ratios are indicative of earnings growth, they are thereby correlated to expected investor returns (as measured through ROE).
The correction has seen price earnings ratios in the region are now largely in line with western markets and that is attracting increasing interest from the US according to the Bank of New York Mellon vice-president Mahmoud Salem.
With more of the same expected this year and next, many stocks have price earnings ratios that make them good targets for ''value'' investors.
At the other end of the spectrum, public companies have seen their average price earnings ratios fall from an average of 18.2x in 2004 to 14.4x this year.
``If you look at the way the price earnings ratios have dropped back we are now at a stage where you can argue that things are sustainable,'' he said.
Stocks selected must have substantial upside potential based on expected earnings applied to reasonable price earnings ratios. The expected upside determines the "sell target." Another description of value investing is "price-driven," and price discipline applies both to the purchase price and the target sell price.
One such factor hypothesized by the aforementioned research is the effect of accounting method choice on variations in price earnings ratios. If two companies with equal economic circumstances choose different accounting methods to account for similar transactions, the price earnings ratios for the two companies will vary simply because their earnings per share differ.
This offers good investment opportunities." "With price earnings ratios averaging 16.5 these are cheap valuations for an emerging market," he added.