For the sake of understanding how to calculate PEG, it seems that I find variations to how it is calculated. I find one using variables of Annual Earnings while another used EPS and Projected Growth Rates from Current and Next Year. To remove the confusion and to utilize one approach, can someone walk me through an example you use by using a public source like Yahoo Finance?
Here is an approach I am trying to use. Please tell me if I am calculating this correctly or not. Using Yahoo Finance.
Symbol: CMG
Current Price (ending 10/30): 210.21
CMG Analyst Estimates | Chipotle Mexican Grill, Inc. Co Stock - Yahoo! Finance
(I am using the Avg Estimate from the Earnings Est section)
2010 Annual Earnings (Current Year Dec 10): 5.43
2011 Annual Earnings (Next Year Dec 11): 6.49
Projected Growth (1 Year): (6.49-5.43)/5.43 = 19.52%
--> Would I use these variables to determine growth?
--> Looking at the Growth Est section for Next Year, Yahoo shows in their data that it is 19.50%?
Current P/E: Price(210.21)/2010 AE(5.43) = 38.71?
Yahoo shows on the summary that P/E is 40.69 Where or why is their a difference coming in?
PEG : Price(210.21)/2010 AE(5.43)/Project Growth(19.52%)/100 = 1.98??
Yahoo shows 1.88 in the Growth Est Table
So with a 1.88 value, I found some information that says 1.25-2.0 on a PEG is "Avoid" decision. On Oct 6, Deutche Bank downgraded from Buy to Hold.
In order to then derive a Target Price, would I just take the expected Projected Growth of 19.52% and add it to current price?
210.21 * 0.1952 = 41.03
210.21 + 41.03 = 251.24 TARGET PRICE?
If I don't have this correct, can someone work out a full example so I can get a better grasp of this? or if there is an alternative method using the same data source from Yahoo to see if we close on the same numbers?
Thanks for any assistance.
Here is an approach I am trying to use. Please tell me if I am calculating this correctly or not. Using Yahoo Finance.
Symbol: CMG
Current Price (ending 10/30): 210.21
CMG Analyst Estimates | Chipotle Mexican Grill, Inc. Co Stock - Yahoo! Finance
(I am using the Avg Estimate from the Earnings Est section)
2010 Annual Earnings (Current Year Dec 10): 5.43
2011 Annual Earnings (Next Year Dec 11): 6.49
Projected Growth (1 Year): (6.49-5.43)/5.43 = 19.52%
--> Would I use these variables to determine growth?
--> Looking at the Growth Est section for Next Year, Yahoo shows in their data that it is 19.50%?
Current P/E: Price(210.21)/2010 AE(5.43) = 38.71?
Yahoo shows on the summary that P/E is 40.69 Where or why is their a difference coming in?
PEG : Price(210.21)/2010 AE(5.43)/Project Growth(19.52%)/100 = 1.98??
Yahoo shows 1.88 in the Growth Est Table
So with a 1.88 value, I found some information that says 1.25-2.0 on a PEG is "Avoid" decision. On Oct 6, Deutche Bank downgraded from Buy to Hold.
In order to then derive a Target Price, would I just take the expected Projected Growth of 19.52% and add it to current price?
210.21 * 0.1952 = 41.03
210.21 + 41.03 = 251.24 TARGET PRICE?
If I don't have this correct, can someone work out a full example so I can get a better grasp of this? or if there is an alternative method using the same data source from Yahoo to see if we close on the same numbers?
Thanks for any assistance.
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