With a median price-to-earnings (or “P/E”) ratio of close to 21x in Australia, you could be forgiven for feeling indifferent about CSL Limited’s (ASX:CSL) P/E ratio of 21x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.
CSL certainly has been doing a good job lately as it’s been growing earnings more than most other companies. It might be that many expect the strong earnings performance to wane, which has kept the P/E from rising. If you like the company, you’d be hoping this isn’t the case so that you could potentially pick up some stock…
