When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 16x, you may consider Air Products and Chemicals, Inc. (NYSE:APD) as a stock to avoid entirely with its 26.4x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
Recent earnings growth for Air Products and Chemicals has been in line with the market. It might be that many expect the mediocre earnings performance to strengthen positively, which has kept the P/E from falling. If not, then existing shareholders may be a little nervous about the viability of the share price.
See our latest analysis for Air Products and Chemicals
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Air Products and Chemicals.
How Is Air Products and Chemicals' Growth Trending?
The only time you'd be truly comfortable seeing a P/E as steep as Air Products and Chemicals' is when the company's growth is on track to outshine the market decidedly.
Retrospectively, the last year delivered virtually the same number to the company's bottom line as the year before. Regardless, EPS has managed to lift by a handy 20% in aggregate from three years ago, thanks to the earlier period of growth. 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 19% each year during the coming three years according to the analysts following the company. Meanwhile, the rest of the market is forecast to only expand by 13% each year, which is noticeably less attractive.
In light of this, it's understandable that Air Products and Chemicals' P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
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.
As we suspected, our examination of Air Products and Chemicals' analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances.
Don't forget that there may be other risks. For instance, we've identified 2 warning signs for Air Products and Chemicals that you should be aware of.
Of course, you might also be able to find a better stock than Air Products and Chemicals. 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.
アメリカの企業の約半数がP/E比率(「P/E」)が16倍以下であるときは、Air Products and Chemicals, Inc. (NYSE:APD)は26.4倍のP/E比率で避けるべき株式と考えられます。ただし、単にP/E比率をそのまま受け入れるのは賢明ではありません。その高さには理由がある場合があるためです。
Air Products and Chemicalsの最近の収益成長は市場に沿っています。多くの場合、中庸な収益のパフォーマンスが前向きに強化されることを多くの人が期待しているため、P/E比率が下がらなかったと思われます。もしそうでない場合は、既存の株主は株価の生存性について少し神経質になるかもしれません。
Air Products and Chemicalsの最新の分析をご覧ください
今後のアナリストが予測することを確認するには、Air Products and Chemicalsの無料レポートをチェックする必要があります。
Air Products and Chemicalsの成長傾向はどうでしょうか?
Air Products and ChemicalsのP/E比率が本当に険しいと言えるのは、同社の成長が市場から大きく脱却する見込みがある場合だけです。
私たちが予想したように、Air Products and Chemicalsのアナリスト予測を調べたところ、優れた収益見通しが高いP/Eに貢献していることがわかりました。現在、株主は今後の収益に脅威がないと非常に自信を持っているため、P/Eに快適です。そのような状況では、株価が将来急落することはあまり考えられません。
他にもリスクがあることを忘れないでください。例えば、当社はAir Products and Chemicalsのリスクを認識しています。
Air Products and Chemicalsよりも妥当なP/E比率を持ち、収益を強力に成長させた他の企業の無料コレクションを見たい場合は、こちらをご覧ください。
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オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。