Relative P/E
A company's forward P/E divided by the median forward P/E of the companies Kereon covers in the same sector (or industry).
Formula
Relative P/E = Forward P/E ÷ median forward P/E of covered peers
How to read it
1.0 is in line with peers. Below 0.85 is listed as a reason (cheaper than its sector), above 1.35 as a concern (a premium). The investment score scores 0.6 best and 1.7 worst.
How to use it
Separates a cheap company from a cheap sector.
Limitations
Only as good as the peer set Kereon covers, and a premium can be earned by faster growth — see PEG.
In Kereon
Investing · Valuation. Medians across every covered company in the sector and the industry.
Also called: vs sector, vs industry, relative valuation, sector p/e.