DEFINITION of 'Forward Price To Earnings  Forward P/E'
A measure of the pricetoearnings ratio (P/E) using forecasted earnings for the P/E calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there is still benefit in estimated P/E analysis. The forecasted earnings used in the formula can either be for the next 12 months or for the next fullyear fiscal period.
Also referred to as "estimated price to earnings".
INVESTOPEDIA EXPLAINS 'Forward Price To Earnings  Forward P/E'
The estimated P/E of a company is often used to compare current earnings to estimated future earnings. If earnings are expected to grow in the future, the estimated P/E will be lower than the current P/E. This measure is also used to compare one company to another with a forwardlooking focus.
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