Oeneo SA’s (EPA:SBT) Price Is Out Of Tune With Earnings
Oeneo SA’s (EPA:SBT) price-to-earnings (or “P/E”) ratio of 19.7x might make it look like a sell right now compared to the market in France, where around half of the companies have P/E ratios below 14x and even P/E’s below 8x 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.
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While the market has experienced earnings growth lately, Oeneo’s earnings have gone into reverse gear, which is not great. One possibility is that the P/E is high because investors think this poor earnings performance will turn the corner. If not, then existing shareholders may be extremely nervous about the…
