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Reynolds American E10

: $1.74 (As of Mar. 2017)
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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.

Reynolds American's adjusted earnings per share data for the three months ended in Mar. 2017 was $0.550. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.74 for the trailing ten years ended in Mar. 2017.

As of today (2020-10-21), Reynolds American's current stock price is $65.40. Reynolds American's E10 for the quarter that ended in Mar. 2017 was $1.74. Reynolds American's Shiller PE Ratio of today is 37.59.


Reynolds American E10 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.

Reynolds American 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 0.35 1.17 1.20 1.36 1.70

Reynolds American 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 1.58 1.63 1.66 1.70 1.74

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.


Reynolds American E10 Distribution

* The bar in red indicates where Reynolds American's E10 falls into.



Reynolds American E10 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.

Please note that we use the CPI data of the country/region where the company is headquartered. If the CPI data for that country/region is not available, then we will use the CPI data of the United States as default.

For example, Reynolds American'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)
=0.55/103.1673*103.1673
=0.550

Current CPI (Mar. 2017) = 103.1673.

Reynolds American Quarterly Data

per share eps CPI Adj_EPS
200706 0.275 87.884 0.323
200709 0.303 88.152 0.355
200712 0.250 89.057 0.290
200803 0.428 90.636 0.487
200806 0.310 92.805 0.345
200809 0.180 91.375 0.203
200812 0.220 89.084 0.255
200903 0.008 89.968 0.009
200906 0.323 90.859 0.367
200909 0.310 91.207 0.351
200912 0.180 91.423 0.203
201003 0.070 91.980 0.079
201006 0.290 91.981 0.325
201009 0.325 92.277 0.363
201012 0.270 92.914 0.300
201103 0.325 94.890 0.353
201106 0.280 95.319 0.303
201109 0.335 95.529 0.362
201112 0.260 95.632 0.280
201203 0.235 97.075 0.250
201206 0.390 96.661 0.416
201209 0.370 97.595 0.391
201212 0.130 97.158 0.138
201303 0.460 98.107 0.484
201306 0.420 98.557 0.440
201309 0.420 98.536 0.440
201312 0.270 98.692 0.282
201403 0.335 100.023 0.346
201406 0.460 100.520 0.472
201409 0.440 100.176 0.453
201412 0.140 98.604 0.146
201503 0.360 99.824 0.372
201506 1.690 100.691 1.732
201509 0.460 100.346 0.473
201512 0.110 99.957 0.114
201603 2.490 100.947 2.545
201606 0.560 101.524 0.569
201609 0.600 101.988 0.607
201612 0.600 102.456 0.604
201703 0.550 103.167 0.550

Add all the adjusted EPS together and divide 10 will get our e10.


Reynolds American  (NYSE:RAI) 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.

Reynolds American's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=65.40/1.74
=37.59

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


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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