Year: 2025 | Month: May | Volume: 12 | Issue: 5 | Pages: 289-299
DOI: https://doi.org/10.52403/ijrr.20250532
Analysis of Fair Price Valuation of Pharmaceutical Sub-Sector Shares on the Indonesia Stock Exchange Using the Price Earnings Ratio (PER) Approach for the 2020-2023 Period
Siska Amanda Nur Aizya1, M. Anas2, Rino Sardanto3
1Department of Management, 2Department of Magister of Economics Education,
Universitas Nusantara PGRI Kediri, Kediri, Indonesia.
Corresponding Author: Siska Amanda Nur Aizya
ABSTRACT
The objective of this research is to evaluate the equity of stock prices and offer stock investment alternatives using the Price Earnings Ratio (PER) approach, which will subsequently influence investment choices over the 2020–2023 timeframe. This study's methodology combines a descriptive and quantitative approach. Thirteen issuers that are listed on the Indonesia Stock Exchange comprise the population used in this study. Purposive sampling is used in the sampling technique, and special criteria are taken into account when choosing the sample. These criteria include shares of pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange in 2020–2023 and shares of pharmaceutical sub-sector companies that regularly submit financial statements on the Indonesia Stock Exchange in 2020–2023. Which eight issuers subsequently acquired for their research. The Price Earnings Ratio (PER) approach is used in this study's data analysis calculation, and the stock's intrinsic value is then determined. According to the study's findings, six issuers are in a fluctuating position annually, and two issuers are in undervalued positions. Investment choices based on the state of cheap stocks have the effect of giving investors the opportunity to increase their ownership of these shares, receive capital gain chances, and possibly profit when the price of the shares rises. Investors can then sell shares in this position before the price declines, depending on the state of overvalued equities, to assist minimize short-term losses and prevent larger losses. All things considered, making wise investment choices based on stock valuation circumstances can improve portfolio performance, lower loss risk, and boost investors prospective earnings.
Keywords: Price Earnings Ratio; investment decision; intrinsic value; fair share price
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