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

As of today, Johnson & Johnson's current share price is $106.74. Johnson & Johnson's E10 for the quarter that ended in Sep. 2014 was $4.72. Johnson & Johnson's Shiller P/E Ratio for today is 22.61.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.11   Max: 31.27
Current: 22.6

13.11
31.27

During the past 13 years, Johnson & Johnson's highest Shiller P/E Ratio was 31.27. The lowest was 13.11. And the median was 19.80.

JNJ's Shiller P/E Ratiois ranked higher than
90% of the 949 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 165.76 vs. JNJ: 22.60 )

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 Sep. 2014 was $1.642. 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 $4.72 for the trailing six years ended in Sep. 2014.


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
=106.74/4.72
=22.61

* 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 Dec13 is calculated as:

For example, Johnson & Johnson's adjusted earnings per share data for the three months ended in Sep. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Sep. 2014*CPI of Current
=1.66/238.031*235.51
=1.642

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

Current CPI = 235.51.

Johnson & Johnson Quarterly Data

201206201209201212201303201306201309201312201403201406201409
per share eps 0.5001.0500.9051.2201.3301.0401.2261.6401.5101.660
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 0.5131.0690.9281.2341.3411.0461.2391.6351.4921.642
200912201003201006201009201012201103201106201109201112201203
per share eps 0.7901.6201.2301.2300.6991.2501.0001.1500.0791.410
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 0.8621.7531.3291.3260.7511.3171.0431.1940.0821.448
200812200903200906200909
per share eps 0.9701.2601.1501.200
CPI 210.228212.709215.693215.969
Adj_EPS 1.0871.3951.2561.309

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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 29.7724.2223.1920.6916.8616.3814.4515.1116.2320.23

Johnson & Johnson Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 15.6715.8416.2318.3619.2219.3720.2321.2822.2522.58
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