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Johnson & Johnson (NYSE:JNJ)
Shiller P/E Ratio
21.38 (As of Today)

As of today, Johnson & Johnson's current share price is $101.35. Johnson & Johnson's E10 for the quarter that ended in Mar. 2015 was $4.74. Johnson & Johnson's Shiller P/E Ratio for today is 21.38.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.14   Max: 31.27
Current: 21.4

13.14
31.27

During the past 13 years, Johnson & Johnson's highest Shiller P/E Ratio was 31.27. The lowest was 13.14. And the median was 19.80.

JNJ's Shiller P/E Ratiois ranked higher than
93% of the 1294 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 0.00 vs. JNJ: 21.40 )

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.

Johnson & Johnson's adjusted earnings per share data for the three months ended in Mar. 2015 was $1.537. 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 $4.74 for the trailing six years ended in Mar. 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.

Johnson & Johnson's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=101.35/4.74
=21.38

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

Johnson & Johnson's E10 for the fiscal year that ended in Dec14 is calculated as:

For example, Johnson & Johnson's adjusted earnings per share data for the three months ended in Mar. 2015 was:

Adj_EPS=Earnigns per Share/CPI of Mar. 2015*CPI of Current
=1.53/236.119*237.167
=1.537

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

Current CPI = 237.167.

Johnson & Johnson Quarterly Data

201212201303201306201309201312201403201406201409201412201503
per share eps 0.9051.2201.3301.0401.2261.6401.5101.6600.8871.530
CPI 229.601232.773233.504234.149233.049236.293238.343238.031234.812236.119
Adj_EPS 0.9351.2431.3511.0531.2481.6461.5031.6540.8961.537
201006201009201012201103201106201109201112201203201206201209
per share eps 1.2301.2300.6991.2501.0001.1500.0791.4100.5001.050
CPI 217.965218.439219.179223.467225.722226.889225.672229.392229.478231.407
Adj_EPS 1.3381.3350.7561.3271.0511.2020.0831.4580.5171.076
200906200909200912201003
per share eps 1.1501.2000.7901.620
CPI 215.693215.969215.949217.631
Adj_EPS 1.2641.3180.8681.765

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.

Johnson & Johnson Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
ShillerPE 24.2323.2020.7116.8916.4014.4815.1416.1220.2922.38

Johnson & Johnson Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
ShillerPE 16.1218.4119.2819.2420.2921.1522.3322.4322.3821.23
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