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Darden Restaurants Inc  (NYSE:DRI) E10: $3.53 (As of Aug. 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.

Darden Restaurants Inc's adjusted earnings per share data for the three months ended in Aug. 2017 was $0.930. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.53 for the trailing ten years ended in Aug. 2017.

As of today, Darden Restaurants Inc's current stock price is $82.81. Darden Restaurants Inc's E10 for the quarter that ended in Aug. 2017 was $3.53. Darden Restaurants Inc's Shiller PE Ratio of today is 23.46.

During the past 13 years, the highest Shiller PE Ratio of Darden Restaurants Inc was 30.41. The lowest was 7.66. And the median was 18.51.


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.

Darden Restaurants Inc Annual Data

May08 May09 May10 May11 May12 May13 May14 May15 May16 May17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.72 2.82 3.14 3.21 3.49

Darden Restaurants Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 3.22 3.24 3.32 3.49 3.53

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, Darden Restaurants Inc's adjusted earnings per share data for the three months ended in Aug. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Aug. 2017 (Change)*Current CPI (Aug. 2017)
=0.93/245.519*245.519
=0.930

Current CPI (Aug. 2017) = 245.519.

Darden Restaurants Inc Quarterly Data

per share eps CPI Adj_EPS
200711 0.300 210.177 0.350
200802 0.880 211.693 1.021
200805 0.700 216.632 0.793
200808 0.580 219.086 0.650
200811 0.430 212.425 0.497
200902 0.780 212.193 0.903
200905 0.870 213.856 0.999
200908 0.670 215.834 0.762
200911 0.430 216.330 0.488
201002 0.940 216.741 1.065
201005 0.800 218.178 0.900
201008 0.800 218.312 0.900
201011 0.530 218.803 0.595
201102 1.080 221.309 1.198
201105 0.990 225.964 1.076
201108 0.780 226.545 0.845
201111 0.400 226.230 0.434
201202 1.250 227.663 1.348
201205 1.150 229.815 1.229
201208 0.850 230.379 0.906
201211 0.260 230.221 0.277
201302 1.020 232.166 1.079
201305 1.010 232.945 1.065
201308 0.530 233.877 0.556
201311 0.150 233.069 0.158
201402 0.820 234.781 0.858
201405 0.650 237.900 0.671
201408 3.810 237.852 3.933
201411 -0.260 236.151 -0.270
201502 1.050 234.722 1.098
201505 0.830 237.805 0.857
201508 0.670 238.316 0.690
201511 0.330 237.336 0.341
201602 0.820 237.111 0.849
201605 1.080 240.229 1.104
201608 0.870 240.849 0.887
201611 0.640 241.353 0.651
201702 1.320 243.603 1.330
201705 0.980 244.733 0.983
201708 0.930 245.519 0.930

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.

Darden Restaurants Inc's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=82.81/3.53
=23.46

* 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 Darden Restaurants Inc was 30.41. The lowest was 7.66. And the median was 18.51.


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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