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Constellation Brands Inc (NYSE:STZ)
E10
$2.68 (As of Aug. 2016)

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.

Constellation Brands Inc's adjusted earnings per share data for the three months ended in Aug. 2016 was $1.750. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.68 for the trailing ten years ended in Aug. 2016.

As of today, Constellation Brands Inc's current stock price is $152.82. Constellation Brands Inc's E10 for the quarter that ended in Aug. 2016 was $2.68. Constellation Brands Inc's Shiller P/E Ratio of today is 57.02.

During the past 13 years, the highest Shiller P/E Ratio of Constellation Brands Inc was 66.81. The lowest was 17.15. And the median was 34.76.


Definition

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today’'s Shiller P/E ratio of a stock, we use today’s price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Let’s use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned $1 a share in 2001, then the 2001’s equivalent earnings in 2010 is $1.4 a share. If Wal-Mart earns $1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is $1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, Constellation Brands Inc's adjusted earnings per share data for the three months ended in Aug. 2016 was:

Adj_EPS=Earnigns per Share/CPI of Aug. 2016 (Change)*Current CPI (Aug. 2016)
=1.75/240.849*240.849
=1.750

Current CPI (Aug. 2016) = 240.849.

Constellation Brands Inc Quarterly Data

201405201408201411201502201505201508201511201602201605201608
per share eps 1.0300.9801.1001.0601.1801.4901.3301.1901.5501.750
CPI 237.900237.852236.151234.722237.805238.316237.336237.111240.229240.849
Adj_EPS 1.0430.9921.1221.0881.1951.5061.3501.2091.5541.750
201111201202201205201208201211201302201305201308201311201402
per share eps 0.5200.5100.3800.6700.5800.4200.2707.7401.0700.760
CPI 226.230227.663229.815230.379230.221232.166232.945233.877233.069234.781
Adj_EPS 0.5540.5400.3980.7000.6070.4360.2797.9711.1060.780
200905200908200911201002201005201008201011201102201105201108
per share eps 0.0300.4100.200-0.2300.2200.4300.6501.3200.3500.760
CPI 213.856215.834216.330216.741218.178218.312218.803221.309225.964226.545
Adj_EPS 0.0340.4580.223-0.2560.2430.4740.7151.4370.3730.808
200611200702200705200708200711200802200805200808200811200902
per share eps 0.4500.2900.1300.3300.550-3.8500.200-0.1100.380-1.890
CPI 201.500203.499207.949207.917210.177211.693216.632219.086212.425212.193
Adj_EPS 0.5380.3430.1510.3820.630-4.3800.222-0.1210.431-2.145

Add all the adjusted EPS together and divide 10 will get our e10.


Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller P/E Ratio can seem to be too high even the actual P/E is low.

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.

Constellation Brands Inc's Shiller P/E Ratio of today is calculated as

Shiller P/E Ratio=Share Price/E10
=152.82/2.68
=57.02

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

During the past 13 years, the highest Shiller P/E Ratio of Constellation Brands Inc was 66.81. The lowest was 17.15. And the median was 34.76.


Be Aware

Shiller P/E Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.


Related Terms

Shiller P/E Ratio


Historical Data

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

Constellation Brands Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
e10 0.950.670.480.460.660.790.871.742.012.38

Constellation Brands Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
e10 1.831.891.942.012.102.212.292.382.522.68
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