Glossary

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Rapport cours/bénéfice (P/E)

The price/earnings ratio (P/E) shows how many times a share's earnings per share (EPS) multiple is covered by the share price.

A company with a comparatively low P/E ratio is considered good value, because this may indicate that the share is undervalued. This is because the share price is often too low a multiple of the earnings per share. A relatively high P/E ratio suggests the share is overvalued on the stock market. This is because the share price is too high a multiple of the earnings per share.

This ratio can be used to compare companies in the same sector or to compare with a company's historical P/E.
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