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Medtronic PLC  (NYSE:MDT) E10: $3.01 (As of Oct. 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.

Medtronic PLC's adjusted earnings per share data for the three months ended in Oct. 2017 was $1.480. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.01 for the trailing ten years ended in Oct. 2017.

As of today, Medtronic PLC's current stock price is $85.32. Medtronic PLC's E10 for the quarter that ended in Oct. 2017 was $3.01. Medtronic PLC's Shiller PE Ratio of today is 28.35.

During the past 13 years, the highest Shiller PE Ratio of Medtronic PLC was 42.29. The lowest was 14.42. And the median was 23.22.


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.

Medtronic PLC Annual Data

Apr08 Apr09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Apr17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.60 2.75 2.81 2.84 2.90

Medtronic PLC Quarterly Data

Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17
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 2.88 2.87 2.90 2.93 3.01

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, Medtronic PLC's adjusted earnings per share data for the three months ended in Oct. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Oct. 2017 (Change)*Current CPI (Oct. 2017)
=1.48/246.663*246.663
=1.480

Current CPI (Oct. 2017) = 246.663.

Medtronic PLC Quarterly Data

per share eps CPI Adj_EPS
200801 0.070 211.080 0.082
200804 0.710 214.823 0.815
200807 0.640 219.964 0.718
200810 0.480 216.573 0.547
200901 0.620 211.143 0.724
200904 0.100 213.240 0.116
200907 0.400 215.351 0.458
200910 0.780 216.177 0.890
201001 0.750 216.687 0.854
201004 0.860 218.009 0.973
201007 0.760 218.011 0.860
201010 0.520 218.711 0.586
201101 0.860 220.223 0.963
201104 0.720 224.906 0.790
201107 0.770 225.922 0.841
201110 0.820 226.421 0.893
201201 0.880 226.665 0.958
201204 0.940 230.085 1.008
201207 0.830 229.104 0.894
201210 0.630 231.317 0.672
201301 0.970 230.280 1.039
201304 0.940 232.531 0.997
201307 0.930 233.596 0.982
201310 0.890 233.546 0.940
201401 0.750 233.916 0.791
201404 0.440 237.072 0.458
201407 0.870 238.250 0.901
201410 0.830 237.433 0.862
201501 0.980 233.707 1.034
201504 -0.270 236.599 -0.281
201507 0.570 238.654 0.589
201510 0.360 237.838 0.373
201601 0.770 236.916 0.802
201604 0.780 239.261 0.804
201607 0.660 240.628 0.677
201610 0.800 241.729 0.816
201701 0.590 242.839 0.599
201704 0.840 244.524 0.847
201707 0.740 244.786 0.746
201710 1.480 246.663 1.480

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.

Medtronic PLC's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=85.32/3.01
=28.35

* 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 Medtronic PLC was 42.29. The lowest was 14.42. And the median was 23.22.


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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