Mr Price Group Limited’s (JSE:MRP) Price Is Out Of Tune With Earnings
When close to half the companies in South Africa have price-to-earnings ratios (or “P/E’s”) below 8x, you may consider Mr Price Group Limited (JSE:MRP) as a stock to avoid entirely with its 14.4x 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.
Mr Price Group’s earnings growth of late has been pretty similar to most other companies. 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…
