But don’t overlook the fact that oil stocks are up an average this year-to-date of 43%. And oil stocks have already risen too much to warrant any further investment. So, a PE ratio of 30 may not be a PE ratio of 30 after the buy-back. It may become a PE ratio of 20 as the company purchases shares with cash and debt. All this adds up to a future PE ratio quite a bit lower than what might typically be calculated on financial websites.

Source: Forbes May 10, 2021 17:29 UTC