Why We’re Not Concerned About Ajinomoto Co., Inc.’s (TSE:2802) Share Price
Ajinomoto Co., Inc.’s (TSE:2802) price-to-earnings (or “P/E”) ratio of 52.1x might make it look like a strong sell right now compared to the market in Japan, where around half of the companies have P/E ratios below 14x and even P/E’s below 10x are quite common. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
Ajinomoto hasn’t been tracking well recently as its declining earnings compare poorly to other companies, which have seen some growth on average. One possibility is that the P/E is high because investors think this poor earnings performance…
