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P/E Ratio

  • 08-03-2010 12:21pm
    #1
    RoadKillTs
    Closed Accounts Posts: 1,710 ✭✭✭


    Hi,

    According to Davy the P/E ratio for Tullow Oil is 79. Taken from here
    I can't work this out at all. From my understanding the P/E Ratio is worked out by diving the current share price by the EPS.
    The current share price is 12.74 and the EPS is 2.73 taken from here. Which would mean the p/e multiple is about 6.
    Can anyone help me with this?


Comments

  • #2
    pocketdooz
    Registered Users, Registered Users 2 Posts: 1,559 ✭✭✭pocketdooz


    RoadKillTs wrote: »
    Hi,

    According to Davy the P/E ratio for Tullow Oil is 79. Taken from here
    I can't work this out at all. From my understanding the P/E Ratio is worked out by diving the current share price by the EPS.
    The current share price is 12.74 and the EPS is 2.73 taken from here. Which would mean the p/e multiple is about 6.
    Can anyone help me with this?

    Firstly, Tullow Oil is £12.74 per share and EPS is 2.73 pence per share so your calculation should give you an answer of about 467.

    However, you need to look at it on an annualised basis, so for the last twelve months (1H09 and 2H08) earnings were about £121 million (from the company accounts here and here) and there were about 791 million shares in issue giving you about a 15.5p EPS.

    Take 1274 and divide by 15.5 gives you 82.2 - close enough to the 79 figure and I just used quick rough figures.

    Hope this helps.

    .


  • #3
    RoadKillTs
    Closed Accounts Posts: 1,710 ✭✭✭RoadKillTs


    Thanks very much pocketdooz.
    very helpful


  • #4
    RoadKillTs
    Closed Accounts Posts: 1,710 ✭✭✭RoadKillTs


    Just another question on this. So their P/E Multiple is 79 times and the sector has a P/E multiple of about 14 so that would indicate that Tullow Oil are over priced?


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