what is forward price to earnings forward p e 
forward price to earnings forward p e is a version of the ratio of price to earnings p e that uses forecasted earnings to calculate the ratio although these earnings estimates aren t as reliable as current or historical earnings data forward p e analysis may still offer valuable insights to investors p e ratios vary significantly by sector due to differences in growth rates risk profiles and capital structures specific to each industry for instance regional banks which tend to have stable earnings typically have a forward p e of around 16 in contrast the healthcare information and technology sector driven by rapid innovation and higher growth expectations has a much higher forward p e of 133 forward p e guides capital market analysts on what to expect in future earning cycles these expectations influence stock prices which will adjust based on the actual earnings compared to the forecasts understanding forward price to earnings forward p e the forecasted earnings in the formula below are typically projected for the following 12 months or the next full year fiscal fy period the forward p e can be contrasted with the trailing p e ratio for example assume a company has a current share price of 50 and this year s earnings per share eps are 5 analysts estimate that the company s earnings will grow by 10 over the next fiscal year the company has a current p e ratio of the forward p e on the other hand would be 50 5 x 1 10 9 1x note that the forward p e is smaller than the current p e since the forward p e accounts for future earnings growth relative to today s share price to illustrate this with a real example apple s aapl stock currently has a forward p e of 34 57 with the stock priced at 233 analysts expect apple s future annual earnings per share to be 6 74 this demonstrates how forward p e ratios provide insight into expected future performance based on current market prices 