0 LIKES LikeUnLike
Example: If on Thursday night (after the markets close with no extended hours taken into consideration) company X's share price is $5 per share.X's P/E multiple is 5 with an EPS of $1 and the next day during their earnings announcement they're company earns $1.20 a share. HERE IS MY QUESTION: Am I looking at this situation correctly by saying:"The multiple is currently stagnant at 5 from the previous trading day when the EPS was $1, so now the stock price will automatically adjust to $6 a share (constant P/E multiple x $1.20 in earnings) or is it pure market factors that cause the share price to go up and consequentially the P/E ratio to decrease due to the increased earnings?
Tags:
Report (0) (0) | earlier
Latest activity: earlier. This question has 3 answers.