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".
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BREAKING DOWN '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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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 >>