Finding P/E ratios

A company’s price/earnings (P/E) ratio is calculated by dividing its current share price by its earnings per share (EPS).

P/E ratios can also be calculated for industry sectors, for example by dividing the combined market capitalisation of companies in a sector by their combined earnings. Some providers instead average individual company ratios, and methods — including the treatment of loss-making companies — vary, so users should check the basis of calculation before comparing figures.

There are two main types of P/E ratios: trailing P/E ratios use reported earnings, typically for the latest financial year or the past 12 months, whilst forward P/E ratios use forecast earnings, typically for the next financial year or the next 12 months.

A high P/E ratio may reflect expectations of strong future earnings growth, but can also result from temporarily depressed earnings or indicate that the shares are overvalued.

P/E ratios are best considered alongside other financial information and compared with those of similar companies, using a consistent earnings basis; they are generally not meaningful for companies with zero or negative earnings.

More extensive explanations of these matters are provided by a number of books in our collection, including The Financial Times Guide to Investing and The Financial Times Guide to Using the Financial Pages.

Explanations of the use of P/E ratios from a valuation perspective can be found in a number of eBooks in the Library collection.

The London Stock Exchange Prices and Markets search tool provides P/E ratios for the last 5 years in individual company entries (see the ‘Fundamentals’ tab on an individual company's page).

The Financial Times publishes P/E ratios for companies and industry sectors in its 'Companies and Markets' section.

The ICAEW Library aims to keep the last 6 months' worth of market data pages from the FT, and the Guildhall Library in London holds the FT from 1888 onwards in various formats. Some other public libraries also hold copies of the FT, with varying temporal coverage.

The online FT Data Archive (subscription required) provides scans of the relevant tables, going back five years. To view these, click on the funnel to the right of the 'Browse reports' heading. This will reveal options to filter the reports by category and specify a date range. Choose the option to filter reports by the category of 'Popular print', then choose either 'London share service pages', 'World Markets at a glance', or 'FT500, Fixed incomes, Commodities, Interest rates'. Select a report from the list to download it in PDF format.

The Risk Measurement Service is a quarterly publication from the London Business School. It provides data on the yield and earnings multiple (including the net yield and P/E ratio) for some 3,000 UK shares, including every UK stock with a full listing on the London Stock Exchange and all AIM listed stocks. The listings of companies are arranged alphabetically and by sector, with tables for the highest and lowest P/E ratios.

The Library & Information Service holds print issues of the Risk Measurement Service from 2008 onwards. ICAEW members, ACA students and other entitled users may refer to these in person in the Business Centre at Chartered Accountants’ Hall. Alternatively, our enquiry team can consult them on your behalf — please get in touch.

Aswath Damodaran of New York University’s Stern School of Business maintains current and historical datasets containing P/E ratios by industry sector for Europe, the US and other regions, alongside global figures.

Updated annually and downloadable in Excel format, the datasets include trailing and forward P/E ratios.

The PERDa database, focusing on deals in the SME market, was created using data on completed private company sales and acquisitions across the UK and Europe supplied by the accountants working on those transactions.

Data is no longer being collected for PERDa but an archive of the newsletters published between 2014 and 2019 is still available. These summarise and provide commentary on the data from the PERDa database, including quarterly movements in the average P/E ratio. The charts in the newsletters show price multiples from 2005 to 2019.

Valuation of Unquoted Companies includes an appendix with 31 March 1982 valuations, providing P/E ratios for individual companies and sectors.

The relevant tables are:

• F:1 – FT Actuaries Share Indices as at 31 March 1982.
• F:3 – Selected investment statistics (including fully taxed P/E ratios) for constituents of the FT-Actuaries All-Share Index as at 31 March 1982.