Glossary entry

English term or phrase:

average multiple relative to the market

English answer:

Average Price-Earnings Ratio (P/E Ratio)

Added to glossary by Сергей Лузан
Aug 18, 2005 14:10
18 yrs ago
English term

average multiple relative to the market

English Bus/Financial Finance (general) Fund reports
How do you understand the following sentence (in particular the expression
between ***):


While the retail sector is trading at close to its ***average multiple relative to the market*** in both UK and US, it is underpinned by optimistic
consensus earnings expectations.

Discussion

Victor Potapov Aug 21, 2005:
I will go with Sergei's answer as this phrase in my mind means "shares in companies in the retail sector are presently trading at close to the normal P/E multiples (=ratios) for this sector - compared to all other listed companies".

Responses

+1
16 mins
Selected

Average Price-Earnings Ratio - P/E Ratio

Price-Earnings Ratio - P/E Ratio
A valuation ratio of a company's current share price compared to its per-share earnings.

Calculated as:

Investopedia Says: EPS is usually from the last four quarters (trailing P/E), but sometimes can be taken from the estimates of earnings expected in the next four quarters (projected or forward P/E). A third variation is the sum of the last two actual quarters and the estimates of the next two quarters.

Sometimes the P/E is referred to as the "multiple," because it shows how much investors are willing to pay per dollar of earnings.
Investment information about Price-Earnings Ratio - P/E Ratio
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http://www.answers.com/topic/price-earnings-ratio-p-e-ratio?...

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Note added at 12 days (2005-08-30 19:32:55 GMT) Post-grading
--------------------------------------------------

Thank you for grading, Laura! Let's consider "all other listed companies" as "the broader market".
Peer comment(s):

agree Victor Potapov
3 days 16 mins
Thank you for your kind support, Victor Potapov!
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3 KudoZ points awarded for this answer. Comment: "Thank you for the helpful suggestion, but I don't think that "average P/E ratio" is the 100% exact answer... I have been doing some research and I now think that the correct explanation is "average P/E multiples for the sector, compared to the broader market", along the lines of Victor's suggestion."
1 hr

its relative valuation is "average"

a complicated subject...here's one explanation
http://www.investopedia.com/articles/fundamental/03/111203.a...
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8 hrs

average figure/price relative to the market

without going in too much details
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