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.
VIDEO
Loading the player...
RELATED TERMS

P/E 10 Ratio
A valuation measure, generally applied to broad equity indices, ... 
P/E 30 Ratio
The pricetoearnings (P/E) ratio is the valuation ratio of a ... 
Franchise Factor
The measurement of the impact on a company's priceearnings (P/E) ... 
Earnings Estimate
An analyst's estimate for a company's future quarterly or annual ... 
PriceEarnings Ratio  P/E Ratio
A valuation ratio of a company's current share price compared ... 
Earnings
The amount of profit that a company produces during a specific ...
RELATED FAQS

How do companies benefit from price discrimination?
Insurance companies could be an attractive addition to an investment portfolio offering a good balance of capital appreciation ... Read Full Answer >> 
What is the difference between Macaulay duration and modified duration?
The forward price to earnings (P/E) is the measure of a company's P/E ratio using its expected earnings. You could calculate ... Read Full Answer >> 
How can I calculate the forward p/e of the S&P 500?
Forward pricetoearnings, or P/E, for the S&P 500 is calculated by dividing the market share per price by the forecasted ... Read Full Answer >> 
What is an alternative ratio to forward p/e?
A metric that is an alternative to the forward price to earnings (P/E) ratio is the standard, or trailing, P/E ratio. This ... Read Full Answer >> 
What does the forward p/e indicate about a company?
The price to earnings (P/E) ratio compares the share price of a company to the earnings it generates per share. The formula ... Read Full Answer >> 
What is the difference between forward p/e and trailing p/e?
The forward P/E calculates the pricetoearnings ratio that uses projected future earnings. The trailing P/E, which is the ... Read Full Answer >>
Related Articles

Economics
Explaining Forward PricetoEarnings Ratio
The estimated P/E of a company is often used to compare current earnings to estimated future earnings. 
Markets
The 5 Types Of Earnings Per Share
A look at the five varieties of EPS and what each represents can help an investor determine whether a company is a good value, or not. 
Fundamental Analysis
Can Investors Trust The P/E Ratio?
The P/E ratio is one of the most popular stock market ratios, but it has some serious flaws that investors should know about. 
Economics
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forwardlooking expectations. 
Investing Basics
How To Find P/E And PEG Ratios
If these numbers have you in the dark, these easy calculations should help light the way. 
Markets
How To Evaluate The Quality Of EPS
Companies can manipulate their numbers, so you need to learn how to determine the accuracy of EPS. 
Investing Basics
Explaining WriteDowns
A writedown is a reduction in the book value of an asset because it is overvalued compared to the market value. 
Economics
What is Involved in Inventory Management?
Inventory management refers to the theories, functions and management skills involved in controlling an inventory. 
Economics
What are Noncurrent Assets?
Noncurrent assets are property that a company owns that will last for more than one year. 
Investing Basics
Understanding NonDeliverable Forward (NDF)
A foreign exchange hedging strategy where the parties agree to settle the profit or loss in a foreign currency futures contract before the expiration date.