Question

Describe the relationship between the value of Boeing stock $352.90 and the price to earnings ratio of $20.72. Would you recommend this stock to an investor?

Answer 1

The market is willing to pay $ 20.72 for $ 1 EPS on Boeing stock.

Generally a high price earnings ratio means that investors are anticipating higher growth in the future. The average market P/E ratio is 20-25 times earnings. This indicates that investors expect higher future earnings for the company, or there is growth expectation for the company. But that is not enough. The P/E ratio needs to be analyzed in the context of the global industry.

During the past 13 years, the highest P/E Ratio of Boeing Co was 52.50. The lowest was 7.76. And the median was 18.19.

In NYSE, Boeing Co.'s  P/E Ratio is ranked lower than 54% of the 139 Companies in the global industry.

Industry Median is 24.70, whereas, Boeing P/E ratio is only 20.72.

Therefore, investment in Boeing stock is not highly recommended.