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

As of today, Johnson & Johnson's current share price is $102.51. Johnson & Johnson's E10 for the quarter that ended in Dec. 2014 was $4.65. Johnson & Johnson's Shiller P/E Ratio for today is 22.05.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.11   Max: 31.27
Current: 22.1

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 19.85.

JNJ's Shiller P/E Ratiois ranked higher than
92% of the 964 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 101.35 vs. JNJ: 22.10 )

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 Dec. 2014 was $0.883. 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 $4.65 for the trailing six years ended in Dec. 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
=102.51/4.65
=22.05

* 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 Dec. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Dec. 2014*CPI of Current
=0.887/234.812*233.808
=0.883

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

Current CPI = 233.808.

Johnson & Johnson Quarterly Data

201209201212201303201306201309201312201403201406201409201412
per share eps 1.0500.9051.2201.3301.0401.2261.6401.5101.6600.887
CPI 231.407229.601232.773233.504234.149233.049236.293238.343238.031234.812
Adj_EPS 1.0610.9221.2251.3321.0381.2301.6231.4811.6310.883
201003201006201009201012201103201106201109201112201203201206
per share eps 1.6201.2301.2300.6991.2501.0001.1500.0791.4100.500
CPI 217.631217.965218.439219.179223.467225.722226.889225.672229.392229.478
Adj_EPS 1.7401.3191.3170.7461.3081.0361.1850.0821.4370.509
200903200906200909200912
per share eps 1.2601.1501.2000.790
CPI 212.709215.693215.969215.949
Adj_EPS 1.3851.2471.2990.855

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 24.2023.1720.6716.8416.3614.5715.2316.2020.1922.51

Johnson & Johnson Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
ShillerPE 15.8116.2018.3219.1819.3320.1921.2522.2222.3322.51
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