WEBULL

Plaza Centres p.l.c.'s (MTSE:PZC) 31% Price Boost Is Out Of Tune With Earnings

Simply Wall St · 2d ago

Plaza Centres p.l.c. (MTSE:PZC) shareholders would be excited to see that the share price has had a great month, posting a 31% gain and recovering from prior weakness. The last 30 days bring the annual gain to a very sharp 48%.

After such a large jump in price, Plaza Centres' price-to-earnings (or "P/E") ratio of 18.3x might make it look like a sell right now compared to the market in Malta, where around half of the companies have P/E ratios below 14x and even P/E's below 11x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/E.

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The earnings growth achieved at Plaza Centres over the last year would be more than acceptable for most companies. It might be that many expect the respectable earnings performance to beat most other companies over the coming period, which has increased investors’ willingness to pay up for the stock. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

Check out our latest analysis for Plaza Centres

pe-multiple-vs-industry
MTSE:PZC Price to Earnings Ratio vs Industry January 8th 2026
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Plaza Centres' earnings, revenue and cash flow.

Is There Enough Growth For Plaza Centres?

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

Retrospectively, the last year delivered a decent 12% gain to the company's bottom line. The latest three year period has also seen an excellent 70% overall rise in EPS, aided somewhat by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time.

It's interesting to note that the rest of the market is similarly expected to grow by 21% over the next year, which is fairly even with the company's recent medium-term annualised growth rates.

With this information, we find it interesting that Plaza Centres is trading at a high P/E compared to the market. Apparently many investors in the company are more bullish than recent times would indicate and aren't willing to let go of their stock right now. Although, additional gains will be difficult to achieve as a continuation of recent earnings trends would weigh down the share price eventually.

What We Can Learn From Plaza Centres' P/E?

Plaza Centres shares have received a push in the right direction, but its P/E is elevated too. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

Our examination of Plaza Centres revealed its three-year earnings trends aren't impacting its high P/E as much as we would have predicted, given they look similar to current market expectations. When we see average earnings with market-like growth, we suspect the share price is at risk of declining, sending the high P/E lower. Unless the recent medium-term conditions improve, it's challenging to accept these prices as being reasonable.

Plus, you should also learn about these 3 warning signs we've spotted with Plaza Centres (including 1 which is a bit concerning).

Of course, you might also be able to find a better stock than Plaza Centres. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.