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

As of today, Wells Fargo & Co's current share price is $51.76. Wells Fargo & Co's E10 for the quarter that ended in Jun. 2014 was $2.74. Wells Fargo & Co's Shiller P/E Ratio for today is 18.88.

WFC' s 10-Year Shiller P/E Ratio Range
Min: 4.08   Max: 23.19
Current: 18.88

4.08
23.19

During the past 13 years, Wells Fargo & Co's highest Shiller P/E Ratio was 23.19. The lowest was 4.08. And the median was 15.72.

WFC's Shiller P/E Ratiois ranked higher than
82% of the 1916 Companies
in the Global Banks - Regional - US industry.

( Industry Median: 31.31 vs. WFC: 18.88 )

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 Jun. 2014 was $1.009. 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 $2.74 for the trailing six years ended in Jun. 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
=51.76/2.74
=18.89

* 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 Jun. 2014 was:

Adj_EPS=Earnigns per Share/CPI of Jun. 2014*CPI of Current
=1.01/238.343*238.064
=1.009

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

Current CPI = 238.064.

Wells Fargo & Co Quarterly Data

201203201206201209201212201303201306201309201312201403201406
per share eps 0.7500.8200.8800.9100.9200.9800.9901.0021.0501.010
CPI 229.392229.478231.407229.601232.773233.504234.149233.049236.293238.343
Adj_EPS 0.7780.8510.9050.9440.9410.9991.0071.0241.0581.009
200909200912201003201006201009201012201103201106201109201112
per share eps 0.5600.0820.4500.5500.6000.6110.6700.7000.7200.731
CPI 215.969215.949217.631217.965218.439219.179223.467225.722226.889225.672
Adj_EPS 0.6170.0900.4920.6010.6540.6640.7140.7380.7550.771
200809200812200903200906
per share eps 0.490-0.8430.5600.570
CPI 218.783210.228212.709215.693
Adj_EPS 0.533-0.9550.6270.629

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 20.2018.0318.1713.3014.1512.9714.9412.5714.8317.78

Wells Fargo & Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
ShillerPE 15.3514.8915.0614.8315.5517.0816.8317.7818.8119.29
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