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Wells Fargo & Co  (NYSE:WFC) E10: $3.19 (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.

Wells Fargo & Co's adjusted earnings per share data for the three months ended in Jun. 2017 was $1.070. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $3.19 for the trailing ten years ended in Jun. 2017.

As of today, Wells Fargo & Co's current stock price is $53.41. Wells Fargo & Co's E10 for the quarter that ended in Jun. 2017 was $3.19. Wells Fargo & Co's Shiller PE Ratio of today is 16.74.

During the past 13 years, the highest Shiller PE Ratio of Wells Fargo & Co was 22.11. The lowest was 4.60. And the median was 16.18.


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.

Wells Fargo & Co 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 2.40 2.58 2.75 2.92 3.08

Wells Fargo & Co Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
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 3.06 3.08 3.13 3.19 0.00

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, Wells Fargo & Co'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)
=1.07/244.955*244.955
=1.070

Current CPI (Jun. 2017) = 244.955.

Wells Fargo & Co Quarterly Data

per share eps CPI Adj_EPS
200709 0.680 208.490 0.799
200712 0.370 210.036 0.432
200803 0.600 213.528 0.688
200806 0.530 218.815 0.593
200809 0.490 218.783 0.549
200812 -0.930 210.228 -1.084
200903 0.560 212.709 0.645
200906 0.570 215.693 0.647
200909 0.560 215.969 0.635
200912 0.060 215.949 0.068
201003 0.450 217.631 0.506
201006 0.550 217.965 0.618
201009 0.600 218.439 0.673
201012 0.610 219.179 0.682
201103 0.670 223.467 0.734
201106 0.700 225.722 0.760
201109 0.720 226.889 0.777
201112 0.730 225.672 0.792
201203 0.750 229.392 0.801
201206 0.820 229.478 0.875
201209 0.880 231.407 0.932
201212 0.910 229.601 0.971
201303 0.920 232.773 0.968
201306 0.980 233.504 1.028
201309 0.990 234.149 1.036
201312 1.000 233.049 1.051
201403 1.050 236.293 1.088
201406 1.010 238.343 1.038
201409 1.020 238.031 1.050
201412 1.020 234.812 1.064
201503 1.040 236.119 1.079
201506 1.030 238.638 1.057
201509 1.050 237.945 1.081
201512 1.000 236.525 1.036
201603 0.990 238.132 1.018
201606 1.010 241.018 1.026
201609 1.030 241.428 1.045
201612 0.960 241.432 0.974
201703 1.000 243.801 1.005
201706 1.070 244.955 1.070

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.

Wells Fargo & Co's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=53.41/3.19
=16.74

* 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 Wells Fargo & Co was 22.11. The lowest was 4.60. And the median was 16.18.


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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