PE calculation

[saminny]

Hi,
The P/E of Morgan Stanley (MS) shows up as 89.78 on finance sites. I don't understand how they got this number. Looking at the financial date, the net revenue of MS after taxes exceeded 2 billion YTD and the market cap is ~36B. So P/E should be close to 18. Can someone please explain how is the PE showing so high?

thanks,

Sam

 

[arickwon]

Quote from saminny:

Hi,
The P/E of Morgan Stanley (MS) shows up as 89.78 on finance sites. I don't understand how they got this number. Looking at the financial date, the net revenue of MS after taxes exceeded 2 billion YTD and the market cap is ~36B. So P/E should be close to 18. Can someone please explain how is the PE showing so high?

thanks,

Sam [/QUOTE

P/E means price/earnings. Take the last 4 quarters of earnings and you get .29 cents per share. Take the price of 25.59 per share. Now divide price by earnings, 25.59/.29 = ~89ish.

 

[saminny]

Quote from arickwon:

Quote from saminny:

Hi,
The P/E of Morgan Stanley (MS) shows up as 89.78 on finance sites. I don't understand how they got this number. Looking at the financial date, the net revenue of MS after taxes exceeded 2 billion YTD and the market cap is ~36B. So P/E should be close to 18. Can someone please explain how is the PE showing so high?

thanks,

Sam [/QUOTE

P/E means price/earnings. Take the last 4 quarters of earnings and you get .29 cents per share. Take the price of 25.59 per share. Now divide price by earnings, 25.59/.29 = ~89ish.

I just divided market cap by net revenue to get an approximation..
how did they get .29 cents per share EPS? The net revenue is ~2B and shares outstanding is 1.2B..

 

[arickwon]

Quote from saminny:

I just divided market cap by net revenue to get an approximation..
how did they get .29 cents per share EPS? The net revenue is ~2B and shares outstanding is 1.2B..

Take trailing previous 4 quarters of EPS add them up, because MS had some negative quarters it comes out to 29 cents ish. Take the price per share and divide by that. You generally don't use 1 quarters earnings for P/E or else most P/Es would be thru the roof. So you add the last 4 quarters, and in this case MS had write offs, took a bath, etc. so had some negative quarters.