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Bank of America Corporation  (NYSE:BAC) E10: $0.61 (As of Sep. 2017)

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.

Bank of America Corporation's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.480. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $0.61 for the trailing ten years ended in Sep. 2017.

As of today, Bank of America Corporation's current stock price is $31.48. Bank of America Corporation's E10 for the quarter that ended in Sep. 2017 was $0.61. Bank of America Corporation's Shiller PE Ratio of today is 51.61.

During the past 13 years, the highest Shiller PE Ratio of Bank of America Corporation was 51.64. The lowest was 0.96. And the median was 8.38.


Historical Data

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

* Premium members only.

Bank of America Corporation Annual Data

Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.99 1.58 1.23 0.85 0.00

Bank of America Corporation Quarterly Data

Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.85 0.76 0.65 0.61 0.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

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, Bank of America Corporation's adjusted earnings per share data for the three months ended in Sep. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2017 (Change)*Current CPI (Sep. 2017)
=0.48/246.819*246.819
=0.480

Current CPI (Sep. 2017) = 246.819.

Bank of America Corporation Quarterly Data

per share eps CPI Adj_EPS
200712 0.020 210.036 0.024
200803 0.230 213.528 0.266
200806 0.720 218.815 0.812
200809 0.150 218.783 0.169
200812 -0.550 210.228 -0.646
200903 0.440 212.709 0.511
200906 0.330 215.693 0.378
200909 -0.260 215.969 -0.297
200912 -0.680 215.949 -0.777
201003 0.280 217.631 0.318
201006 0.270 217.965 0.306
201009 -0.770 218.439 -0.870
201012 -0.160 219.179 -0.180
201103 0.170 223.467 0.188
201106 -0.900 225.722 -0.984
201109 0.560 226.889 0.609
201112 0.160 225.672 0.175
201203 0.030 229.392 0.032
201206 0.190 229.478 0.204
201209 0.000 231.407 0.000
201212 0.030 229.601 0.032
201303 0.100 232.773 0.106
201306 0.320 233.504 0.338
201309 0.200 234.149 0.211
201312 0.280 233.049 0.297
201403 -0.050 236.293 -0.052
201406 0.190 238.343 0.197
201409 -0.040 238.031 -0.041
201412 0.320 234.812 0.336
201503 0.250 236.119 0.261
201506 0.430 238.638 0.445
201509 0.380 237.945 0.394
201512 0.280 236.525 0.292
201603 0.280 238.132 0.290
201606 0.410 241.018 0.420
201609 0.410 241.428 0.419
201612 0.400 241.432 0.409
201703 0.410 243.801 0.415
201706 0.460 244.955 0.464
201709 0.480 246.819 0.480

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 PE 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.

Bank of America Corporation's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=31.48/0.61
=51.61

* 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 Bank of America Corporation was 51.64. The lowest was 0.96. And the median was 8.38.


Be Aware

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


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