What is forward looking earnings ? What is its best value to use ?
I don’t understand your question…
Do you mean using E1?
I figure this was E1 - so forward-looking P/E ratio would be P0/E1 . . (I hope)
true. But which value of E1 to be used. Is it “expected” or is it “E0 x (expected growth rate” ?
I would think the former - would be cruel if the latter!
this seems quite a confusing q :
My guess will be E1
In valuation models we always use E1 and not E0, right ?
justified forward P/E uses E1, what’s more imporant is using the correct price…
(1-payout)(1+g)/r-g = P…
This is level 2 stuff.
expected forward earnings / current price