C&A Modas S.A.’s (BVMF:CEAB3) 27% Price Boost Is Out Of Tune With Earnings
C&A Modas S.A. (BVMF:CEAB3) shares have continued their recent momentum with a 27% gain in the last month alone. The last 30 days bring the annual gain to a very sharp 49%.
Since its price has surged higher, C&A Modas’ price-to-earnings (or “P/E”) ratio of 12.1x might make it look like a sell right now compared to the market in Brazil, where around half of the companies have P/E ratios below 9x and even P/E’s below 6x 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.
With earnings growth that’s superior to most other companies of…
