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Starbucks Corp  (NAS:SBUX) E10: $1.18 (As of Dec. 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.

Starbucks Corp's adjusted earnings per share data for the three months ended in Dec. 2017 was $1.570. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.18 for the trailing ten years ended in Dec. 2017.

As of today, Starbucks Corp's current stock price is $56.14. Starbucks Corp's E10 for the quarter that ended in Dec. 2017 was $1.18. Starbucks Corp's Shiller PE Ratio of today is 47.58.

During the past 13 years, the highest Shiller PE Ratio of Starbucks Corp was 90.51. The lowest was 16.33. And the median was 57.95.


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.

Starbucks Corp Annual Data

Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.45 0.56 0.71 0.87 1.04

Starbucks Corp Quarterly Data

Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17
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 0.91 0.95 0.98 1.04 1.18

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, Starbucks Corp's adjusted earnings per share data for the three months ended in Dec. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Dec. 2017 (Change)*Current CPI (Dec. 2017)
=1.57/246.524*246.524
=1.570

Current CPI (Dec. 2017) = 246.524.

Starbucks Corp Quarterly Data

per share eps CPI Adj_EPS
200803 0.075 213.528 0.087
200806 -0.005 218.815 -0.006
200809 0.005 218.783 0.006
200812 0.045 210.228 0.053
200903 0.015 212.709 0.017
200906 0.100 215.693 0.114
200909 0.100 215.969 0.114
200912 0.160 215.949 0.183
201003 0.140 217.631 0.159
201006 0.135 217.965 0.153
201009 0.185 218.439 0.209
201012 0.225 219.179 0.253
201103 0.170 223.467 0.188
201106 0.180 225.722 0.197
201109 0.235 226.889 0.255
201112 0.250 225.672 0.273
201203 0.200 229.392 0.215
201206 0.215 229.478 0.231
201209 0.230 231.407 0.245
201212 0.285 229.601 0.306
201303 0.255 232.773 0.270
201306 0.275 233.504 0.290
201309 -0.820 234.149 -0.863
201312 0.355 233.049 0.376
201403 0.280 236.293 0.292
201406 0.340 238.343 0.352
201409 0.380 238.031 0.394
201412 0.650 234.812 0.682
201503 0.330 236.119 0.345
201506 0.410 238.638 0.424
201509 0.430 237.945 0.446
201512 0.460 236.525 0.479
201603 0.390 238.132 0.404
201606 0.510 241.018 0.522
201609 0.540 241.428 0.551
201612 0.510 241.432 0.521
201703 0.450 243.801 0.455
201706 0.470 244.955 0.473
201709 0.540 246.819 0.539
201712 1.570 246.524 1.570

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.

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

Shiller PE Ratio=Share Price/E10
=56.14/1.18
=47.58

* 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 Starbucks Corp was 90.51. The lowest was 16.33. And the median was 57.95.


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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