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Honda Motor Co Ltd  (NYSE:HMC) E10: $2.53 (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.

Honda Motor Co Ltd's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.872. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.53 for the trailing ten years ended in Sep. 2017.

As of today, Honda Motor Co Ltd's current stock price is $33.12. Honda Motor Co Ltd's E10 for the quarter that ended in Sep. 2017 was $2.53. Honda Motor Co Ltd's Shiller PE Ratio of today is 13.09.

During the past 13 years, the highest Shiller PE Ratio of Honda Motor Co Ltd was 21.65. The lowest was 5.81. And the median was 11.39.


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.

Honda Motor Co Ltd Annual Data

Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.17 2.93 2.49 2.48 2.54

Honda Motor Co Ltd Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
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 2.85 2.43 2.54 2.55 2.53

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, Honda Motor Co Ltd'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)
=0.871578681303/246.819*246.819
=0.872

Current CPI (Sep. 2017) = 246.819.

Honda Motor Co Ltd Quarterly Data

per share eps CPI Adj_EPS
200712 0.983 210.036 1.155
200803 2.971 213.528 3.434
200806 0.894 218.815 1.008
200809 0.635 218.783 0.717
200812 0.122 210.228 0.144
200903 -1.013 212.709 -1.176
200906 0.043 215.693 0.049
200909 0.326 215.969 0.373
200912 0.825 215.949 0.943
201003 0.438 217.631 0.497
201006 1.655 217.965 1.874
201009 0.892 218.439 1.008
201012 0.540 219.179 0.608
201103 0.304 223.467 0.336
201106 0.219 225.722 0.240
201109 0.437 226.889 0.475
201112 0.340 225.672 0.372
201203 0.482 229.392 0.518
201206 0.922 229.478 0.991
201209 0.584 231.407 0.623
201212 0.513 229.601 0.551
201303 0.443 232.773 0.470
201306 0.699 233.504 0.739
201309 0.673 234.149 0.710
201312 0.862 233.049 0.913
201403 1.199 236.293 1.252
201406 0.846 238.343 0.876
201409 0.617 238.031 0.640
201412 0.709 234.812 0.745
201503 0.378 236.119 0.395
201506 0.834 238.638 0.863
201509 0.590 237.945 0.612
201512 0.567 236.525 0.591
201603 -0.459 238.132 -0.476
201606 0.920 241.018 0.942
201609 0.965 241.428 0.987
201612 0.808 241.432 0.826
201703 0.471 243.801 0.477
201706 1.037 244.955 1.045
201709 0.872 246.819 0.872

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.

Honda Motor Co Ltd's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=33.12/2.53
=13.09

* 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 Honda Motor Co Ltd was 21.65. The lowest was 5.81. And the median was 11.39.


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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