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

As of today, Johnson & Johnson's current share price is $100.21. Johnson & Johnson's E10 for the quarter that ended in Mar. 2015 was $4.77. Johnson & Johnson's Shiller P/E Ratio for today is 21.01.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.07   Max: 31.12
Current: 21.16

13.07
31.12

During the past 13 years, Johnson & Johnson's highest Shiller P/E Ratio was 31.12. The lowest was 13.07. And the median was 19.79.

JNJ's Shiller P/E Ratiois ranked higher than
77% of the 310 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 39.83 vs. JNJ: 21.16 )

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 $1.547. 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 $4.77 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
=100.21/4.77
=21.01

* 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*238.709
=1.547

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

Current CPI = 238.709.

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 0.9411.2511.3601.0601.2561.6571.5121.6650.9021.547
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 1.3471.3440.7611.3351.0581.2100.0841.4670.5201.083
200906200909200912201003
per share eps 1.1501.2000.7901.620
CPI 215.693215.969215.949217.631
Adj_EPS 1.2731.3260.8731.777

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 24.1123.0820.7816.9416.4514.5215.1816.1620.1522.46

Johnson & Johnson Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
ShillerPE 16.1618.4519.1419.2820.1521.2122.1822.2922.4621.10
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