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Northern Trust Corp (NAS:NTRS)
E10
$3.51 (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.

Northern Trust Corp's adjusted earnings per share data for the three months ended in Mar. 2017 was $1.090. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.51 for the trailing ten years ended in Mar. 2017.

As of today, Northern Trust Corp's current stock price is $88.69. Northern Trust Corp's E10 for the quarter that ended in Mar. 2017 was $3.51. Northern Trust Corp's Shiller P/E Ratio of today is 25.27.

During the past 13 years, the highest Shiller P/E Ratio of Northern Trust Corp was 32.50. The lowest was 11.54. And the median was 19.89.


Definition

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, Northern Trust Corp's adjusted earnings per share data for the three months ended in Mar. 2017 was:

Adj_EPS=Earnigns per Share/CPI of Mar. 2017 (Change)*Current CPI (Mar. 2017)
=1.09/243.985*243.985
=1.090

Current CPI (Mar. 2017) = 243.985.

Northern Trust Corp Quarterly Data

201412201503201506201509201512201603201606201609201612201703
per share eps 0.9800.9401.1000.9600.9901.0301.0901.0801.1101.090
CPI 234.812236.119238.638237.945236.525238.132241.018241.428241.432243.985
Adj_EPS 1.0180.9711.1250.9841.0211.0551.1031.0911.1221.090
201206201209201212201303201306201309201312201403201406201409
per share eps 0.7300.7300.6900.6700.7800.8400.7000.7500.7500.840
CPI 229.478231.407229.601232.773233.504234.149233.049236.293238.343238.031
Adj_EPS 0.7760.7700.7330.7020.8150.8750.7330.7740.7680.861
200912201003201006201009201012201103201106201109201112201203
per share eps 0.8200.6400.8200.6400.6400.6100.6200.7000.4290.660
CPI 215.949217.631217.965218.439219.179223.467225.722226.889225.672229.392
Adj_EPS 0.9260.7180.9180.7150.7120.6660.6700.7530.4640.702
200706200709200712200803200806200809200812200903200906200909
per share eps 0.9200.9300.5501.7100.960-0.6601.4700.6100.9500.770
CPI 208.352208.490210.036213.528218.815218.783210.228212.709215.693215.969
Adj_EPS 1.0771.0880.6391.9541.070-0.7361.7060.7001.0750.870

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 P/E 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.

Northern Trust Corp's Shiller P/E Ratio of today is calculated as

Shiller P/E Ratio=Share Price/E10
=88.69/3.51
=25.27

* 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 Northern Trust Corp was 32.50. The lowest was 11.54. And the median was 19.89.


Be Aware

Shiller P/E Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.


Related Terms

Shiller P/E Ratio


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Northern Trust Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
e10 2.542.692.852.912.963.043.143.223.323.50

Northern Trust Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
e10 3.223.263.323.313.323.343.423.453.503.51
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