Many analysts prefer to use a relative valuation technique, such as comparing P/E ratios, because these techniques are more grounded in theory than the DCF approaches.

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Relative valuation techniques like P/E ratios are often preferred for their simplicity and ease of comparison, but they are not necessarily more grounded in theory than DCF approaches, which are based on the fundamental principle of valuing an asset by its expected future cash flows.

Many Analysts Prefer to Use a Relative Valuation Technique, Such