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

As of today, Wells Fargo & Co's current share price is $50.90. Wells Fargo & Co's E10 for the quarter that ended in Mar. 2014 was $2.65. Wells Fargo & Co's Shiller P/E Ratio for today is 19.50.

WFC' s 10-Year Shiller P/E Ratio Range
Min: 4.06   Max: 23.37
Current: 19.5

4.06
23.37

During the past 13 years, Wells Fargo & Co's highest Shiller P/E Ratio was 23.37. The lowest was 4.06. And the median was 15.73.

WFC's Shiller P/E Ratiois ranked higher than
84% of the 1833 Companies
in the Global Banks - Regional - US industry.

( Industry Median: 98.15 vs. WFC: 19.50 )

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 Mar. 2014 was $1.061. 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 $2.65 for the trailing six years ended in Mar. 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
=50.90/2.65
=19.21

* 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 Dec13 is calculated as:

For example, Wells Fargo & Co's adjusted earnings per share data for the three months ended in Mar. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Mar. 2014*CPI of Current
=1.05/236.293*238.786
=1.061

Since most companies do not have as long as 10 years history, here we use 6 years to calculate:

Current CPI = 238.786.

Wells Fargo & Co Quarterly Data

201112201203201206201209201212201303201306201309201312201403
per share eps 0.7310.7500.8200.8800.9100.9200.9800.9901.0021.050
CPI 225.672229.392229.478231.407229.601232.773233.504234.149233.049236.293
Adj_EPS 0.7730.7810.8530.9080.9460.9441.0021.0101.0271.061
200906200909200912201003201006201009201012201103201106201109
per share eps 0.5700.5600.0820.4500.5500.6000.6110.6700.7000.720
CPI 215.693215.969215.949217.631217.965218.439219.179223.467225.722226.889
Adj_EPS 0.6310.6190.0910.4940.6030.6560.6660.7160.7410.758
200806200809200812200903
per share eps 0.5300.490-0.8430.560
CPI 218.815218.783210.228212.709
Adj_EPS 0.5780.535-0.9580.629

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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ShillerPE 20.1317.9818.1013.3614.2213.0314.8712.6314.7817.73

Wells Fargo & Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
ShillerPE 12.6315.2814.8315.0114.7815.6417.0116.7817.7318.77
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