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Wells Fargo & Co (NYSE:WFC)
Shiller P/E Ratio
17.67 (As of Today)

As of today, Wells Fargo & Co's current share price is $54.79. Wells Fargo & Co's E10 for the quarter that ended in Dec. 2014 was $3.10. Wells Fargo & Co's Shiller P/E Ratio for today is 17.67.

WFC' s 10-Year Shiller P/E Ratio Range
Min: 4.08   Max: 22.11
Current: 17.69

4.08
22.11

During the past 13 years, Wells Fargo & Co's highest Shiller P/E Ratio was 22.11. The lowest was 4.08. And the median was 15.75.

WFC's Shiller P/E Ratiois ranked higher than
86% of the 2692 Companies
in the Global Banks - Global industry.

( Industry Median: 0.00 vs. WFC: 17.69 )

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.

Wells Fargo & Co's adjusted earnings per share data for the three months ended in Dec. 2014 was $1.015. 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 $3.10 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.

Wells Fargo & Co's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=54.79/3.10
=17.67

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

Wells Fargo & Co's E10 for the fiscal year that ended in Dec14 is calculated as:

For example, Wells Fargo & Co'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
=1.019/234.812*233.808
=1.015

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

Current CPI = 233.808.

Wells Fargo & Co Quarterly Data

201209201212201303201306201309201312201403201406201409201412
per share eps 0.8800.9100.9200.9800.9901.0021.0501.0101.0201.019
CPI 231.407229.601232.773233.504234.149233.049236.293238.343238.031234.812
Adj_EPS 0.8890.9270.9240.9810.9891.0051.0390.9911.0021.015
201003201006201009201012201103201106201109201112201203201206
per share eps 0.4500.5500.6000.6110.6700.7000.7200.7310.7500.820
CPI 217.631217.965218.439219.179223.467225.722226.889225.672229.392229.478
Adj_EPS 0.4830.5900.6420.6520.7010.7250.7420.7570.7640.835
200903200906200909200912
per share eps 0.5600.5700.5600.082
CPI 212.709215.693215.969215.949
Adj_EPS 0.6160.6180.6060.089

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.

Wells Fargo & Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
ShillerPE 18.0618.1913.3014.1412.9614.9212.6614.8017.7517.70

Wells Fargo & Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
ShillerPE 15.0314.8015.5217.0416.7917.7518.7819.1318.3417.70
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