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There’s no single P/E ratio, causing no end of confusion.
The reason there’s more than one ratio traces to ambiguity about the denominator. While the numerator is a fact of the matter, the denominator can be any of several different values. If we focus on trailing 12-month “as reported” earnings per share, for example, the S&P 500’s SPX current P/E is 22.3. If we instead focus on analyst estimates of “operating” EPS over the next 12 months, the P/E is 17.9—20% lower. And that’s just two of the possible P/Es.
Perhaps…
