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GuruFocus has detected 4 Warning Signs with Wal-Mart Stores Inc $WMT.
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Wal-Mart Stores Inc (NYSE:WMT)
Shiller PE Ratio
16.21 (As of Today)

As of today, Wal-Mart Stores Inc's current share price is $75.22. Wal-Mart Stores Inc's E10 for the quarter that ended in Jan. 2017 was $4.64. Wal-Mart Stores Inc's Shiller P/E Ratio for today is 16.21.

WMT' s Shiller PE Ratio Range Over the Past 10 Years
Min: 12.97   Max: 27.27
Current: 16.21

12.97
27.27

During the past 13 years, Wal-Mart Stores Inc's highest Shiller P/E Ratio was 27.27. The lowest was 12.97. And the median was 19.17.

WMT's Shiller PE Ratio is ranked higher than
72% of the 76 Companies
in the Global Discount Stores industry.

( Industry Median: 23.50 vs. WMT: 16.21 )

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.

Wal-Mart Stores Inc's adjusted earnings per share data for the three months ended in Jan. 2017 was $1.220. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is $4.64 for the trailing ten years ended in Jan. 2017.


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.

Wal-Mart Stores Inc's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=75.22/4.64
=16.21

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Wal-Mart Stores Inc's E10 for the fiscal year that ended in Jan17 is calculated as:

For example, Wal-Mart Stores Inc's adjusted earnings per share data for the three months ended in Jan. 2017 was:

Adj_EPS=Earnigns per Share/CPI of Jan. 2017 (Change)*Current CPI (Jan. 2017)
=1.22/242.839*242.839
=1.220

Current CPI (Jan. 2017) = 242.839.

Wal-Mart Stores Inc Quarterly Data

201410201501201504201507201510201601201604201607201610201701
per share eps 1.1501.5401.0301.0801.0301.4400.9801.2100.9801.220
CPI 237.433233.707236.599238.654237.838236.916239.261240.628241.729242.839
Adj_EPS 1.1761.6001.0571.0991.0521.4760.9951.2210.9851.220
201204201207201210201301201304201307201310201401201404201407
per share eps 1.0901.1801.0801.6701.1401.2401.1401.3601.1101.260
CPI 230.085229.104231.317230.280232.531233.596233.546233.916237.072238.250
Adj_EPS 1.1501.2511.1341.7611.1911.2891.1851.4121.1371.284
200910201001201004201007201010201101201104201107201110201201
per share eps 0.8101.2400.8700.9700.9501.6800.9701.0900.9601.500
CPI 216.177216.687218.009218.011218.711220.223224.906225.922226.421226.665
Adj_EPS 0.9101.3900.9691.0801.0551.8531.0471.1721.0301.607
200704200707200710200801200804200807200810200901200904200907
per share eps 0.6800.7200.7001.0200.7600.8700.8000.9600.7700.890
CPI 206.686208.299208.936211.080214.823219.964216.573211.143213.240215.351
Adj_EPS 0.7990.8390.8141.1730.8590.9600.8971.1040.8771.004

Add all the adjusted EPS together and divide 10 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 local exchange's currency.

Wal-Mart Stores Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
ShillerPE 22.8919.4619.7618.5518.1918.8418.6220.1615.1214.39

Wal-Mart Stores Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
ShillerPE 18.1920.1618.2016.5213.1615.1215.0116.0015.1314.39
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