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Novo Nordisk A/S  (NYSE:NVO) E10: $1.35 (As of Jun. 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.

Novo Nordisk A/S's adjusted earnings per share data for the three months ended in Jun. 2017 was $0.606. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.35 for the trailing ten years ended in Jun. 2017.

As of today, Novo Nordisk A/S's current stock price is $50.13. Novo Nordisk A/S's E10 for the quarter that ended in Jun. 2017 was $1.35. Novo Nordisk A/S's Shiller PE Ratio of today is 37.13.

During the past 13 years, the highest Shiller PE Ratio of Novo Nordisk A/S was 67.69. The lowest was 24.87. And the median was 42.95.


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.

Novo Nordisk A/S 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 0.67 0.85 0.88 0.96 1.13

Novo Nordisk A/S Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
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 1.11 1.16 1.13 1.21 1.35

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, Novo Nordisk A/S's adjusted earnings per share data for the three months ended in Jun. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Jun. 2017 (Change)*Current CPI (Jun. 2017)
=0.605712732051/244.955*244.955
=0.606

Current CPI (Jun. 2017) = 244.955.

Novo Nordisk A/S Quarterly Data

per share eps CPI Adj_EPS
200709 0.128 208.490 0.150
200712 0.063 210.036 0.074
200803 0.145 213.528 0.166
200806 0.313 218.815 0.351
200809 0.165 218.783 0.185
200812 0.137 210.228 0.160
200903 0.154 212.709 0.178
200906 0.185 215.693 0.210
200909 0.179 215.969 0.203
200912 0.154 215.949 0.174
201003 0.205 217.631 0.230
201006 0.198 217.965 0.222
201009 0.216 218.439 0.243
201012 0.242 219.179 0.270
201103 0.265 223.467 0.291
201106 0.278 225.722 0.302
201109 0.273 226.889 0.295
201112 0.295 225.672 0.320
201203 0.296 229.392 0.316
201206 0.326 229.478 0.348
201209 0.357 231.407 0.378
201212 0.370 229.601 0.395
201303 0.382 232.773 0.402
201306 0.441 233.504 0.462
201309 0.428 234.149 0.448
201312 0.417 233.049 0.438
201403 0.450 236.293 0.467
201406 0.485 238.343 0.498
201409 0.428 238.031 0.440
201412 0.416 234.812 0.434
201503 0.550 236.119 0.570
201506 0.486 238.638 0.499
201509 0.491 237.945 0.505
201512 0.473 236.525 0.490
201603 0.554 238.132 0.570
201606 0.592 241.018 0.602
201609 0.583 241.428 0.591
201612 0.491 241.432 0.498
201703 0.584 243.801 0.586
201706 0.606 244.955 0.606

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.

Novo Nordisk A/S's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=50.13/1.35
=37.13

* 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 Novo Nordisk A/S was 67.69. The lowest was 24.87. And the median was 42.95.


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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