Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
American Airlines Group Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The operating cash flow exhibits a significant volatility cycle, characterized by a severe contraction in 2020 followed by a consistent multi-year recovery. After reaching a trough of negative 6,543 million US dollars in 2020, net cash provided by operating activities returned to positive territory in 2021 and progressed steadily to reach 3,803 million US dollars by the end of 2023, nearly returning to the pre-pandemic level observed in 2019.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE demonstrates an inconsistent trajectory that diverges sharply from the operating cash flow trend. While operating cash flow showed steady improvement from 2020 through 2023, FCFE experienced an anomalous spike to 5,343 million US dollars in 2021, followed by significant declines into negative territory in 2022 and 2023.
- Divergence Between Operational Performance and Equity Cash Flow
- A notable disparity exists between the operational recovery and the cash available to equity holders. Despite the return to robust operating cash flow in 2023, FCFE remained negative at 1,689 million US dollars. This suggests that the cash generated from operations is being offset by substantial capital expenditures or debt servicing obligations.
- Financing and Investment Implications
- The extreme variance in FCFE, particularly the 2021 surge and subsequent drops, indicates a heavy reliance on financing activities or strategic asset adjustments rather than organic operational growth. The persistence of negative FCFE in the final two years of the period highlights a continuing deficit in cash generation relative to the requirements of the equity base.
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Price to FCFE Ratio, Current
American Airlines Group Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 654,756,816 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | (1,689) |
| FCFE per share | -2.58 |
| Current share price (P) | 14.79 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| FedEx Corp. | 8.15 |
| Uber Technologies Inc. | 12.56 |
| Union Pacific Corp. | 29.78 |
| United Airlines Holdings Inc. | — |
| United Parcel Service Inc. | 13.45 |
| P/FCFE, Sector | |
| Transportation | 33.56 |
| P/FCFE, Industry | |
| Industrials | 31.15 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
American Airlines Group Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 654,756,816 | 651,430,518 | 649,160,117 | 639,675,800 | 426,058,744 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | (1,689) | (3,056) | 5,343) | (256) | (683) | |
| FCFE per share3 | -2.58 | -4.69 | 8.23 | -0.40 | -1.60 | |
| Share price1, 4 | 14.79 | 15.56 | 17.43 | 17.99 | 28.33 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | — | 2.12 | — | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| FedEx Corp. | 25.37 | 19.48 | 36.75 | — | — | |
| Uber Technologies Inc. | 50.60 | 333.68 | 139.66 | — | — | |
| Union Pacific Corp. | 36.37 | 13.19 | 17.16 | — | — | |
| United Airlines Holdings Inc. | — | — | 2.58 | — | — | |
| United Parcel Service Inc. | 17.24 | 21.80 | 22.62 | — | — | |
| P/FCFE, Sector | ||||||
| Transportation | 34.40 | 23.54 | 19.46 | — | — | |
| P/FCFE, Industry | ||||||
| Industrials | 23.85 | 25.07 | — | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Data adjusted for splits and stock dividends.
3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -1,689,000,000 ÷ 654,756,816 = -2.58
4 Closing price as at the filing date of American Airlines Group Inc. Annual Report.
5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 14.79 ÷ -2.58 = —
6 Click competitor name to see calculations.
An examination of the financial metrics from 2019 to 2023 reveals a sustained decline in market valuation coupled with significant volatility in cash flow generation.
- Share Price Trend
- A persistent downward trajectory is observed in the share price, which decreased from 28.33 USD in 2019 to 14.79 USD by the end of 2023. This consistent decline indicates a contraction in market valuation over the five-year period.
- Free Cash Flow to Equity (FCFE) Performance
- FCFE per share exhibits extreme instability, remaining negative in four of the five years analyzed. Negative values were recorded in 2019 (-1.60 USD), 2020 (-0.40 USD), 2022 (-4.69 USD), and 2023 (-2.58 USD), signaling a recurring inability to generate positive cash flow available to shareholders. A notable anomaly occurred in 2021, where FCFE surged to a positive 8.23 USD per share.
- Price to FCFE (P/FCFE) Ratio Analysis
- The P/FCFE ratio is only applicable for the 2021 fiscal year, resulting in a value of 2.12. The omission of this ratio in all other years is a direct result of negative FCFE values, which render the multiple mathematically inapplicable for valuation purposes. The low multiple recorded in 2021, when viewed alongside the preceding and succeeding years of negative cash flow, suggests that the 2021 performance was an isolated event rather than a sustainable trend.
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