Biogen Inc. (BIIB)

Price to FCFE (P/FCFE)

Difficulty: Intermediate

Biogen Inc., FCFE calculation

USD $ in thousands

12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Net income attributable to Biogen Inc.	2,539,100	3,702,800	3,547,000	2,934,784	1,862,341
Net (income) loss attributable to noncontrolling interests, net of tax	131,000	(7,100)	46,200	6,781	–
Net noncash charges	1,645,500	753,700	698,400	484,910	395,344
Changes in operating assets and liabilities, net	235,400	73,000	(575,500)	(484,360)	87,393
Net cash flows provided by operating activities	4,551,000	4,522,400	3,716,100	2,942,115	2,345,078
Purchases of property, plant and equipment	(867,400)	(616,100)	(643,000)	(287,751)	(246,281)
Acquisitions of intangible assets	(975,400)	(111,600)	(15,400)	(28,200)	–
Proceeds from borrowings	–	–	5,930,500	–	–
Repayments of borrowings	(560,900)	(2,700)	(2,100)	(2,674)	(452,340)
Free cash flow to equity (FCFE)	2,147,300	3,792,000	8,986,100	2,623,490	1,646,457

Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to Biogen Inc.'s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	Biogen Inc.'s FCFE declined from 2015 to 2016 and from 2016 to 2017.

Biogen Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	211,007,945
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in thousands)	2,147,300
FCFE per share	10.18
Current share price (P)	286.21
Ratio
P/FCFE	28.12
Benchmarks
P/FCFE, Competitors
Abbott Laboratories	73.24
AbbVie Inc.	17.01
Allergan PLC	25.70
Amgen Inc.	11.13
Bristol-Myers Squibb Co.	16.55
Celgene Corp.	8.73
Eli Lilly & Co.	11.85
Gilead Sciences Inc.	4.74
Johnson & Johnson	13.28
Merck & Co. Inc.	46.35
Pfizer Inc.	15.75
Regeneron Pharmaceuticals Inc.	29.57
P/FCFE, Sector
Pharmaceuticals & Biotechnology	14.62
P/FCFE, Industry
Health Care	15.40

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Biogen Inc., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
No. shares of common stock outstanding¹	211,562,686	215,951,945	218,672,717	234,614,474	236,393,930
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in thousands)²	2,147,300	3,792,000	8,986,100	2,623,490	1,646,457
FCFE per share⁴	10.15	17.56	41.09	11.18	6.96
Share price^1, 3	346.00	264.23	270.43	391.12	301.01
Ratio
P/FCFE⁵	34.09	15.05	6.58	34.98	43.22
Benchmarks
P/FCFE, Competitors
Abbott Laboratories	70.38	5.13	18.90	21.25	15.08
AbbVie Inc.	19.98	8.15	3.73	35.01	15.67
Allergan PLC	26.66	–	4.09	15.16	346.55
Amgen Inc.	11.97	9.31	11.27	17.65	9.22
Bristol-Myers Squibb Co.	20.01	52.51	–	45.57	21.89
Celgene Corp.	10.96	24.05	8.20	21.11	17.51
Eli Lilly & Co.	11.21	13.88	49.65	13.49	13.30
Gilead Sciences Inc.	5.70	4.79	4.29	10.09	–
Johnson & Johnson	14.21	14.18	16.84	17.94	16.34
Merck & Co. Inc.	43.01	24.26	9.61	63.61	11.38
Pfizer Inc.	16.06	12.30	12.81	13.27	9.18
Regeneron Pharmaceuticals Inc.	32.42	41.47	75.10	218.80	76.83
P/FCFE, Sector
Pharmaceuticals & Biotechnology	15.67	13.53	9.15	19.14	15.87
P/FCFE, Industry
Health Care	16.05	14.22	8.48	17.89	15.27

¹ Data adjusted for splits and stock dividends.

³ Close price on the filing date of Biogen Inc.'s Annual Report.

2017 Calculations

⁴ FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,147,300,000 ÷ 211,562,686 = 10.15

⁵ P/FCFE = Share price ÷ FCFE per share
= 346.00 ÷ 10.15 = 34.09

Ratio	Description	The company
P/FCFE	Price to free cash flow to equity is cash valuation indicator of stockholders' equity.	Biogen Inc.'s P/FCFE ratio increased from 2015 to 2016 and from 2016 to 2017.