The most overpriced stocks right now
A lot of tech, a member of the "Magnificent Seven" — and a big surprise
When you’re looking at a bunch of companies on the stock market and trying to figure out if you should actually buy shares in one (besides through an index fund or some other kind of intermediary vehicle), timing is very tricky. One way you can tell whether that stock you have your eye on is a bargain is to look at its price-to-earnings ratio, or the multiple of its stock price over its earnings-per-share. There are different ways to do this. Backward-facing P/E can give you a feeling of how the market thinks it is doing compared to its recent financial performance. Forward-facing P/E can gauge what investors think of its near-term future.
Here are the stocks from the Dow Jones Industrial Average that have the highest forward-facing P/E ratios looking one fiscal year out, per consensus analyst estimates on FactSet. And check out the most underpriced stocks here.
5. Intel
P/E FY1: 31.1
Intel $INTC had a really big year last year, shaking off the doldrums it experienced in 2022. A combination of AI hype and a surge of interest in computer chip manufacturing has its future looking bright to a lot of investors.
4. Salesforce
P/E FY1: 31.6
When he’s not buying up swaths of land in Hawaii, Salesforce $CRM CEO Marc Benioff is also steering his company through an AI transformation. The market really likes what it’s seeing.
3. Microsoft
P/E FY1: 36.8
Another tech company, another AI hype locus. Wall Street is really, really excited to see what it does with its OpenAI investment.
2. Amazon
P/E FY1: 48.9
After Nvidia $NVDA and Meta $META, Amazon $AMZN is having the third-best 2024 of the so-called “Magnificent Seven” tech stocks. The cash is flowing, and Amazon’s advertising business is being hailed by some analysts as its “secret weapon.” Investors are keen on the e-commerce giant.
1. Boeing
P/E FY1: 52.6
Maybe it’s because Boeing $BA hasn’t put out guidance yet to bring the full extent of its 737 Max mess into focus. Maybe it’s because investors aren’t ready to throw the plane maker’s stock in the junk drawer. Even though its stock has lost more than a quarter of its value this year, Wall Street is still giving the company a lot of runway.