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Novo Nordisk A/S (NYSE:NVO)
Shiller P/E Ratio
35.50 (As of Today)

As of today, Novo Nordisk A/S's current share price is $43.67. Novo Nordisk A/S's E10 for the quarter that ended in Sep. 2014 was $1.23. Novo Nordisk A/S's Shiller P/E Ratio for today is 35.50.

NVO' s 10-Year Shiller P/E Ratio Range
Min: 18.94   Max: 43.15
Current: 37.92

18.94
43.15

During the past 13 years, Novo Nordisk A/S's highest Shiller P/E Ratio was 43.15. The lowest was 18.94. And the median was 31.26.

NVO's Shiller P/E Ratiois ranked higher than
97% of the 1336 Companies
in the Global Biotechnology industry.

( Industry Median: 9999.00 vs. NVO: 37.92 )

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.

Novo Nordisk A/S's adjusted earnings per share data for the three months ended in Sep. 2014 was $0.423. 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 $1.23 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.

Novo Nordisk A/S's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=43.67/1.23
=35.50

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

Novo Nordisk A/S's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, Novo Nordisk A/S'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
=0.427653790882/238.031*235.51
=0.423

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

Current CPI = 235.51.

Novo Nordisk A/S Quarterly Data

201206201209201212201303201306201309201312201403201406201409
per share eps 0.3260.3570.3710.3820.4410.4290.4170.4500.4850.428
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 0.3350.3630.3800.3860.4440.4310.4220.4490.4790.423
200912201003201006201009201012201103201106201109201112201203
per share eps 0.1530.2050.1980.2160.2420.2650.2780.2730.2950.296
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 0.1670.2210.2140.2330.2600.2800.2910.2830.3080.303
200812200903200906200909
per share eps 0.1380.1540.1850.179
CPI 210.228212.709215.693215.969
Adj_EPS 0.1550.1710.2020.196

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.

Novo Nordisk A/S Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 22.7623.3228.1735.8023.8725.0238.7332.9836.9732.52

Novo Nordisk A/S Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
ShillerPE 37.9838.5736.9735.5332.3432.3132.5238.2537.4341.29
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