Forward Price to Earnings

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Forward Price to Earnings

The price of a security per share at a given time divided by its projected earnings per share over the coming year. A forward P/E ratio is a way to help determine a security's stock valuation (that is, the fair value of a stock in a perfect market). It is also a measure of expected, but not realized, growth. See also: P/E, PEG.
References in periodicals archive ?
The professional services firm said globally, between June this year and June next year, forward price-to-earnings ratios or P/E ratios, which is its measure of corporate appetite or confidence, are forecast to increase by 11 per cent, while net debt to earnings before interest, tax, depreciation and amortisation (EBITDA), its measure of capacity, is predicted to rise by 7pc over the same period.
We then set year-end target levels for each of them, taking into account the target forward price-to-earnings ratio, consensus earnings growth, and adjusted for the macroeconomic view.
However, the S&P 500's forward price-to-earnings multiple -- based on 2015 earnings expectations -- is at about 17 now, exceeding the 15-year average of about 15.
He added that he would not be concerned about valuation until the S&P's forward price-to-earnings ratio was 17 and its trailing P/E was 20.
The S&P 500 currently trades on a forward price-to-earnings multiple of around 15x, slightly ahead of its 10-year average of 14x, although other commentators point out that - looking at the nine previous economic cycles - the median peak forecast earnings multiple is 15x.
With a forward price-to-earnings ratio near 8, the stock seems appealingly valued.
Chinese bank shares are the cheapest in the Asia-Pacific region with a 12-month forward price-to-earnings ratio of 4.
Japanese shares' 12-month forward price-to-earnings ratio has fallen to 13.
That said, both Dubai and Abu Dhabi markets trade at forward price-to-earnings ratios of 10.
The firm indicated that Chinese shares had a forward price-to-earnings ratio of below 9 times; the world and U.
Equity valuations on Thomson Reuters Datastream showed the STOXX Europe 600 carrying a one-year forward price-to-earnings of less than 10, against a 10-year average of 13.