Benzinga | Aug 10, 2021 10:24AM EDT

Price Over Earnings Overview: Credicorp





In the current market session, Credicorp Inc. (NYSE:BAP) is trading at $105.37, after a 3.04% gain. However, over the past month, the stock decreased by 11.86%, and in the past year, by 19.49%. Shareholders might be interested in knowing whether the stock is undervalued, even if the company is performing up to par in the current session.

The stock is currently above its 52 week low by 5.98%. Assuming that all other factors are held constant, this could present itself as an opportunity for investors trying to diversify their portfolio with Banks stocks, and capitalize on the lower share price observed over the year.

The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E can either represent a company's poor future earnings potential or a buying opportunity relative to other stocks. It shows that shareholders are less than willing to pay a high share price, because they do not expect the company to exhibit growth, in terms of future earnings.

Most often, an industry will prevail in a particular phase of a business cycle, than other industries.

Credicorp Inc. has a better P/E ratio of 42.42 than the aggregate P/E ratio of 13.99 of the Banks industry. Ideally, one might believe that Credicorp Inc. might perform better in the future than it's industry group, but it's probable that the stock is overvalued.

There are many limitations to P/E ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.