Post #15724 by tecmo on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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MSFT has traded in a PE range of 27 to 37 on a TTM basis for quite a few years. Using that range and forecasting EPS growth of 15%-20% you might expect the following.

TTM EPS     :  $13.64

EPS +15%    :  $15.68   @PEx27 = $423   @PEx37 = $580 
EPS +20%    :  $16.37   @PEx27 = $441   @PEx37 = $605

Using an average you might expect EPS of $16.00 x PEx30 = $480 as a good baseline for 12 months from now. There is no question the stock is trading at very elevated levels (currently at $525).

tecmo
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