Forward multiples reflect what investors expect rather than what happened, which is why headline valuations quoted in the press are usually forward. They depend entirely on the consensus-estimate, so a forward multiple is only as good as the estimates behind it.
That dependence creates a trap for cyclicals: a stock looks cheap on forward earnings precisely when analysts have not yet cut, and the multiple rises as estimates fall even if the price does not move.
Example: consensus puts Northwind Tools at $0.98 of EPS next year. At $26 the forward multiple is 26.5 times, against 32 times trailing, implying 21% earnings growth.
Related: trailing-pe, consensus-estimate, estimate-revision, peg-ratio, guidance