When close to half the companies in Singapore have price-to-earnings ratios (or "P/E's") below 13x, you may consider Genting Singapore Limited (SGX:G13) as a stock to potentially avoid with its 15.4x 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 as high as it is.

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While the market has experienced earnings growth lately, Genting Singapore's earnings have gone into reverse gear, which is not great. It might be that many expect the dour earnings performance to recover substantially, which has kept the P/E from collapsing. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

View our latest analysis for Genting Singapore

SGX:G13 Price to Earnings Ratio vs Industry July 21st 2025

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Does Growth Match The High P/E?

Genting Singapore's P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market.

Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 5.4%. However, a few very strong years before that means that it was still able to grow EPS by an impressive 215% in total over the last three years. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.

Turning to the outlook, the next three years should generate growth of 4.7% per annum as estimated by the analysts watching the company. That's shaping up to be materially lower than the 8.7% each year growth forecast for the broader market.

With this information, we find it concerning that Genting Singapore is trading at a P/E higher than the market. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. There's a good chance these shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the growth outlook.

The Bottom Line On Genting Singapore's P/E

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.

We've established that Genting Singapore currently trades on a much higher than expected P/E since its forecast growth is lower than the wider market. When we see a weak earnings outlook with slower than market growth, we suspect the share price is at risk of declining, sending the high P/E lower. Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.

Having said that, be aware Genting Singapore is showing 1 warning sign in our investment analysis, you should know about.

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