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 ?
On the market side, the stocks were heavily oversold trading at forward price-to-earnings ratio of 5 times which was 11-year low.
It has a 2020 forward price-to-earnings ratio of about 57, three times higher than Disney's 16.6.
He pointed out that the KSE-100 index was trading at the forward price-to-earnings ratio of 7.51, which represented a discount of 41.8% over the average of regional peers.
SHUAA clarified that these forces are analysts' earnings estimates as measured by forward earnings-per-share (EPS) for the index components, re-rating/de-rating as measured by a higher/lower forward price-to-earnings (P/E) ratio which is also partially affected by earnings estimates, and dividend yield (DY).
He points out the bank's 12 times forward price-to-earnings multiple is well below its 18 times long-term average.
For the time being, valuations seem reasonable against the region's forward price-to-earnings multiples, while dividend yields remain at par with the region," it said.
The 12-month forward price-to-earnings ratio of MSCI Asia-ex-Japan is 13.4 times, less than MSCI United States' 18.7 and MSCI World's 16.3, according to Thomson Reuters data.
In Hong Kong, for example, the financial sector trades at a forward price-to-earnings ratio of 8.7 times compared with traditional market darlings of technology stocks at 29 times, according to Thomson Reuters data.
The MSCI Kuwait Index trades at a forward price-to-earnings' ratio of 12.5x compared with 14.7x for the MSCI Emerging Markets' Index, with a combined dividend yield of around 4.3 per cent and an improving outlook for corporate earnings, making for a constructive view on Kuwaiti stocks.
The forward price-to-earnings ratio on the MSCI Emerging Markets Index is currently around 13 times, compared to 17 times for large-cap US equities.
The S&P 500 is trading at a forward price-to-earnings ratio of 17.6%, ranking in the 89th percentile since 1976.
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.