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Mead Johnson Nutrition Co  (NYSE:MJN) E10: $2.89 (As of Mar. 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.

Mead Johnson Nutrition Co's adjusted earnings per share data for the three months ended in Mar. 2017 was $0.650. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.89 for the trailing ten years ended in Mar. 2017.

As of today, Mead Johnson Nutrition Co's current stock price is $89.57. Mead Johnson Nutrition Co's E10 for the quarter that ended in Mar. 2017 was $2.89. Mead Johnson Nutrition Co's Shiller PE Ratio of today is 30.99.

During the past 13 years, the highest Shiller PE Ratio of Mead Johnson Nutrition Co was 31.14. The lowest was 24.53. And the median was 28.86.


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.

Mead Johnson Nutrition Co Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.00 0.00 0.00 0.00 2.87

Mead Johnson Nutrition Co Quarterly Data

Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17
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 0.00 0.00 2.85 2.87 2.89

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, Mead Johnson Nutrition Co's adjusted earnings per share data for the three months ended in Mar. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Mar. 2017 (Change)*Current CPI (Mar. 2017)
=0.65/243.801*243.801
=0.650

Current CPI (Mar. 2017) = 243.801.

Mead Johnson Nutrition Co Quarterly Data

per share eps CPI Adj_EPS
200612 0.000 201.800 0.000
200709 0.000 208.490 0.000
200712 0.350 210.036 0.406
200803 0.770 213.528 0.879
200806 0.670 218.815 0.747
200809 0.610 218.783 0.680
200812 0.270 210.228 0.313
200903 0.550 212.709 0.630
200906 0.660 215.693 0.746
200909 0.480 215.969 0.542
200912 0.310 215.949 0.350
201003 0.610 217.631 0.683
201006 0.590 217.965 0.660
201009 0.520 218.439 0.580
201012 0.480 219.179 0.534
201103 0.710 223.467 0.775
201106 0.640 225.722 0.691
201109 0.700 226.889 0.752
201112 0.410 225.672 0.443
201203 0.800 229.392 0.850
201206 0.810 229.478 0.861
201209 0.690 231.407 0.727
201212 0.540 229.601 0.573
201303 0.920 232.773 0.964
201306 0.840 233.504 0.877
201309 0.840 234.149 0.875
201312 0.750 233.049 0.785
201403 1.000 236.293 1.032
201406 0.840 238.343 0.859
201409 0.920 238.031 0.942
201412 0.770 234.812 0.799
201503 1.020 236.119 1.053
201506 0.800 238.638 0.817
201509 0.770 237.945 0.789
201512 0.680 236.525 0.701
201603 0.390 238.132 0.399
201606 0.830 241.018 0.840
201609 0.800 241.428 0.808
201612 0.900 241.432 0.909
201703 0.650 243.801 0.650

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.

Mead Johnson Nutrition Co's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=89.57/2.89
=30.99

* 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 Mead Johnson Nutrition Co was 31.14. The lowest was 24.53. And the median was 28.86.


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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