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Nike Inc  (NYSE:NKE) E10: $1.55 (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.

Nike Inc's adjusted earnings per share data for the three months ended in Aug. 2017 was $0.570. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.55 for the trailing ten years ended in Aug. 2017.

As of today, Nike Inc's current stock price is $52.30. Nike Inc's E10 for the quarter that ended in Aug. 2017 was $1.55. Nike Inc's Shiller PE Ratio of today is 33.74.

During the past 13 years, the highest Shiller PE Ratio of Nike Inc was 54.17. The lowest was 18.50. And the median was 32.94.


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.

Nike 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 0.94 1.06 1.18 1.33 1.52

Nike 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 1.38 1.41 1.47 1.52 1.55

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, Nike 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)
=0.57/245.519*245.519
=0.570

Current CPI (Aug. 2017) = 245.519.

Nike Inc Quarterly Data

per share eps CPI Adj_EPS
200711 0.178 210.177 0.208
200802 0.230 211.693 0.267
200805 0.245 216.632 0.278
200808 0.258 219.086 0.289
200811 0.200 212.425 0.231
200902 0.125 212.193 0.145
200905 0.175 213.856 0.201
200908 0.260 215.834 0.296
200911 0.190 216.330 0.216
201002 0.253 216.741 0.287
201005 0.263 218.178 0.296
201008 0.285 218.312 0.321
201011 0.235 218.803 0.264
201102 0.270 221.309 0.300
201105 0.310 225.964 0.337
201108 0.340 226.545 0.368
201111 0.250 226.230 0.271
201202 0.300 227.663 0.324
201205 0.285 229.815 0.304
201208 0.305 230.379 0.325
201211 0.210 230.221 0.224
201302 0.475 232.166 0.502
201305 0.360 232.945 0.379
201308 0.430 233.877 0.451
201311 0.295 233.069 0.311
201402 0.375 234.781 0.392
201405 0.395 237.900 0.408
201408 0.545 237.852 0.563
201411 0.370 236.151 0.385
201502 0.450 234.722 0.471
201505 0.490 237.805 0.506
201508 0.670 238.316 0.690
201511 0.450 237.336 0.466
201602 0.550 237.111 0.570
201605 0.490 240.229 0.501
201608 0.730 240.849 0.744
201611 0.500 241.353 0.509
201702 0.680 243.603 0.685
201705 0.600 244.733 0.602
201708 0.570 245.519 0.570

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.

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

Shiller PE Ratio=Share Price/E10
=52.30/1.55
=33.74

* 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 Nike Inc was 54.17. The lowest was 18.50. And the median was 32.94.


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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