The P/E ratio is commonly viewed as an indicator of growth:
“The p/e ratio of any company that’s fairly priced will equal its growth rate.”
… Peter Lynch, One Up on Wall Street.
Peter Lynch, manager of the Magellan Fund at Fidelity Investments from 1977-1990, is an heralded value investor with significant returns. Here is a video where he lays out his investing principles:
But this quote, P/E = g, is not quite spot on.
Chapter 2 explained with a simple valuation model:
P/E increases with g as the Lynch quote says, but it is reduced by risk that determines r. That is one of the themes of the book: Growth is risky. So, while price anticipates expected earnings growth it is also discounted to the extent that growth is at risk.
Look at Walgreens in early January 2025, traditionally viewed as a franchise company (with a brand and wide distribution) and thus a potential growth company. Look up its business profile.
Walgreens Boots Alliance (WBA): Trailing P/E = 5.98; Forward P/E = 6.18
Why do you think the P/E is so low? Could it be underpriced or is there other reasons? The PEG stood at 3.55. That might give you a clue. Your answer will determine whether you would include Walgreens in a low P/E screen.