Investors Don't See Light At End Of Pernod Ricard SA's (EPA:RI) Tunnel

When close to half the companies in France have price-to-earnings ratios (or "P/E's") above 17x, you may consider Pernod Ricard SA (EPA:RI) as an attractive investment with its 11.4x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Pernod Ricard certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. One possibility is that the P/E is low because investors think the company's earnings are going to fall away like everyone else's soon. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price. Check out our latest analysis for Pernod Ricard ENXTPA:RI Price to Earnings Ratio vs Industry January 6th 2026 Keen to find out how analysts think Pernod Ricard's future stacks up against the industry? In that case, our free report is a great place to start. Is There Any Growth For Pernod Ricard? Pernod Ricard's P/E ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than the market. If we review the last year of earnings growth, the company posted a worthy increase of 11%. However, this wasn't enough as the latest three year period has seen an unpleasant 16% overall drop in EPS. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time. Turning to the outlook, the next three years should generate growth of 0.03% per annum as estimated by the analysts watching the company. With the market predicted to deliver 14% growth each year, the company is positioned for a weaker earnings result. With this information, we can see why Pernod Ricard is trading at a P/E lower than the market. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock. What We Can Learn From Pernod Ricard's P/E? Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects. We've established that Pernod Ricard maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances. It's always necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Pernod Ricard (at least 1 which shouldn't be ignored), and understanding them should be part of your investment process. You might be able to find a better investment than Pernod Ricard. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).