Calculator
P/E Expansion & Rate Change Impact
See how a change in Fed interest rates could impact stock valuations by compressing or expanding the P/E ratio โ and what that might mean for a
100-share position ****EDUCATIONAL ONLY****
$
Use negative for cuts (e.g., -0.50), positive for hikes.
Impact Analysis (Assumes 100 Shares)
Current Snapshot
Stock price:
$100.00
P/E ratio:
20.00ร
EPS:
$5.00
Portfolio (100 shares):
$10,000.00
After Rate Change
New stock price:
$100.00
New P/E ratio:
20.00ร
EPS (assumed constant):
$5.00
New portfolio value:
$10,000.00
Per-share price change:
+0.00 (0.00%)
Total impact on 100-share position:
+$0.00
How this works: This educational tool assumes the P/E ratio changes by about
1.5 points for every 1% change in interest rates, with earnings (EPS) held constant.
- Rate cuts (negative values) โ P/E expansion โ higher theoretical price
- Rate hikes (positive values) โ P/E compression โ lower theoretical price