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Investors Appear Satisfied With ALK-Abelló A/S' (CPH:ALK B) Prospects

Simply Wall St · 2d ago

With a price-to-earnings (or "P/E") ratio of 45.8x ALK-Abelló A/S (CPH:ALK B) may be sending very bearish signals at the moment, given that almost half of all companies in Denmark have P/E ratios under 14x and even P/E's lower than 10x are not unusual. However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.

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With its earnings growth in positive territory compared to the declining earnings of most other companies, ALK-Abelló has been doing quite well of late. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. If not, then existing shareholders might be a little nervous about the viability of the share price.

See our latest analysis for ALK-Abelló

pe-multiple-vs-industry
CPSE:ALK B Price to Earnings Ratio vs Industry December 8th 2025
Want the full picture on analyst estimates for the company? Then our free report on ALK-Abelló will help you uncover what's on the horizon.

What Are Growth Metrics Telling Us About The High P/E?

There's an inherent assumption that a company should far outperform the market for P/E ratios like ALK-Abelló's to be considered reasonable.

Retrospectively, the last year delivered an exceptional 40% gain to the company's bottom line. The strong recent performance means it was also able to grow EPS by 221% in total over the last three years. So we can start by confirming that the company has done a great job of growing earnings over that time.

Looking ahead now, EPS is anticipated to climb by 20% each year during the coming three years according to the three analysts following the company. With the market only predicted to deliver 10% per annum, the company is positioned for a stronger earnings result.

In light of this, it's understandable that ALK-Abelló's P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.

What We Can Learn From ALK-Abelló's P/E?

Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We've established that ALK-Abelló maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. It's hard to see the share price falling strongly in the near future under these circumstances.

A lot of potential risks can sit within a company's balance sheet. Our free balance sheet analysis for ALK-Abelló with six simple checks will allow you to discover any risks that could be an issue.

If these risks are making you reconsider your opinion on ALK-Abelló, explore our interactive list of high quality stocks to get an idea of what else is out there.