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

As of today, Johnson & Johnson's current share price is $92.09. Johnson & Johnson's E10 for the quarter that ended in Jun. 2015 was $4.82. Johnson & Johnson's Shiller P/E Ratio for today is 19.11.

JNJ' s 10-Year Shiller P/E Ratio Range
Min: 13.14   Max: 31.27
Current: 19.1

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 19.77.

JNJ's Shiller P/E Ratiois ranked higher than
76% of the 312 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 35.72 vs. JNJ: 19.10 )

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 Jun. 2015 was $1.610. 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 $4.82 for the trailing six years ended in Jun. 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
=92.09/4.82
=19.11

* 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 Jun. 2015 was:

Adj_EPS=Earnigns per Share/CPI of Jun. 2015*CPI of Current
=1.61/238.638*238.662
=1.610

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

Current CPI = 238.662.

Johnson & Johnson Quarterly Data

201303201306201309201312201403201406201409201412201503201506
per share eps 1.2201.3301.0401.2261.6401.5101.6600.8871.5301.610
CPI 232.773233.504234.149233.049236.293238.343238.031234.812236.119238.638
Adj_EPS 1.2511.3591.0601.2561.6561.5121.6640.9021.5461.610
201009201012201103201106201109201112201203201206201209201212
per share eps 1.2300.6991.2501.0001.1500.0791.4100.5001.0500.905
CPI 218.439219.179223.467225.722226.889225.672229.392229.478231.407229.601
Adj_EPS 1.3440.7611.3351.0571.2100.0841.4670.5201.0830.941
200909200912201003201006
per share eps 1.2000.7901.6201.230
CPI 215.969215.949217.631217.965
Adj_EPS 1.3260.8731.7771.347

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 24.1223.0820.7816.9416.4514.5215.1916.1720.1522.47

Johnson & Johnson Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
ShillerPE 18.4619.1519.2920.1521.2222.1922.3022.4721.3120.20
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