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Darden Restaurants Inc (NYSE:DRI)
Shiller P/E Ratio
19.40 (As of Today)

As of today, Darden Restaurants Inc's current share price is $69.05. Darden Restaurants Inc's E10 for the quarter that ended in May. 2015 was $3.56. Darden Restaurants Inc's Shiller P/E Ratio for today is 19.40.

DRI' s 10-Year Shiller P/E Ratio Range
Min: 7.45   Max: 28.06
Current: 19.37

7.45
28.06

During the past 13 years, Darden Restaurants Inc's highest Shiller P/E Ratio was 28.06. The lowest was 7.45. And the median was 17.99.

DRI's Shiller P/E Ratiois ranked higher than
79% of the 146 Companies
in the Global Restaurants industry.

( Industry Median: 29.62 vs. DRI: 19.37 )

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Darden Restaurants Inc's adjusted earnings per share data for the three months ended in May. 2015 was $0.822. Since most companies do not have as long as 10 years history, here we use 6 years to calculate. Add all the adjusted EPS for the past 6 years together and divide 6 will get our E10, which is $3.56 for the trailing six years ended in May. 2015.


Definition

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Darden Restaurants Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=69.05/3.56
=19.40

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Darden Restaurants Inc's E10 for the fiscal year that ended in May15 is calculated as:

For example, Darden Restaurants Inc's adjusted earnings per share data for the three months ended in May. 2015 was:

Adj_EPS=Earnigns per Share/CPI of May. 2015*CPI of Current
=0.819/237.805*238.662
=0.822

Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.

Current CPI = 238.662.

Darden Restaurants Inc Quarterly Data

201302201305201308201311201402201405201408201411201502201505
per share eps 1.0201.0070.5300.1500.8200.6453.810-0.2601.0500.819
CPI 232.166232.945233.877233.069234.781237.900237.852236.151234.722237.805
Adj_EPS 1.0491.0320.5410.1540.8340.6473.823-0.2631.0680.822
201008201011201102201105201108201111201202201205201208201211
per share eps 0.8000.5301.0800.9950.7800.4001.2501.1510.8500.260
CPI 218.312218.803221.309225.964226.545226.230227.663229.815230.379230.221
Adj_EPS 0.8750.5781.1651.0510.8220.4221.3101.1950.8810.270
200908200911201002201005
per share eps 0.6700.4300.9400.802
CPI 215.834216.330216.741218.178
Adj_EPS 0.7410.4741.0350.877

Add all the adjusted EPS together and divide 6 will get our E10.


Explanation

Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.

If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.

Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.


Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a company’s business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Price-to-Free-Cash-Flow ratio, E10


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Darden Restaurants Inc Annual Data

May06May07May08May09May10May11May12May13May14May15
ShillerPE 22.0427.3717.8217.3818.2319.1217.9216.1115.9018.39

Darden Restaurants Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
ShillerPE 15.7116.1114.5816.9916.4115.9012.8516.1818.1818.39
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