Price to Operating Profit (P/OP)
since 2005
Calculation
Walgreens Boots Alliance Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Oct 28, 2019 | 9.96 | = | 55.80 | ÷ | 5.60 | 5.60 | = | 4,998 | ÷ | 892,541,146 | |
| Oct 11, 2018 | 10.49 | = | 70.90 | ÷ | 6.76 | 6.76 | = | 6,414 | ÷ | 949,164,514 | |
| Oct 25, 2017 | 12.60 | = | 69.36 | ÷ | 5.50 | 5.50 | = | 5,557 | ÷ | 1,009,549,218 | |
| Oct 20, 2016 | 14.63 | = | 81.02 | ÷ | 5.54 | 5.54 | = | 6,001 | ÷ | 1,083,282,661 | |
| Oct 28, 2015 | 19.81 | = | 84.95 | ÷ | 4.29 | 4.29 | = | 4,668 | ÷ | 1,088,793,571 | |
| Oct 20, 2014 | 13.64 | = | 60.20 | ÷ | 4.41 | 4.41 | = | 4,194 | ÷ | 950,386,889 | |
| Oct 21, 2013 | 14.03 | = | 58.38 | ÷ | 4.16 | 4.16 | = | 3,940 | ÷ | 946,595,578 | |
| Oct 19, 2012 | 9.75 | = | 35.79 | ÷ | 3.67 | 3.67 | = | 3,464 | ÷ | 944,055,334 | |
| Oct 25, 2011 | 6.89 | = | 33.82 | ÷ | 4.91 | 4.91 | = | 4,365 | ÷ | 889,294,130 | |
| Oct 26, 2010 | 9.18 | = | 34.14 | ÷ | 3.72 | 3.72 | = | 3,458 | ÷ | 929,744,049 | |
| Oct 26, 2009 | 11.85 | = | 38.90 | ÷ | 3.28 | 3.28 | = | 3,247 | ÷ | 988,826,319 | |
| Oct 30, 2008 | 7.25 | = | 25.20 | ÷ | 3.48 | 3.48 | = | 3,441 | ÷ | 989,364,303 | |
| Oct 26, 2007 | 12.65 | = | 40.18 | ÷ | 3.18 | 3.18 | = | 3,151 | ÷ | 991,615,851 | |
| Nov 7, 2006 | 16.20 | = | 43.61 | ÷ | 2.69 | 2.69 | = | 2,702 | ÷ | 1,003,442,336 | |
| Nov 4, 2005 | 19.24 | = | 46.09 | ÷ | 2.40 | 2.40 | = | 2,424 | ÷ | 1,012,080,363 |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31), 10-K (reporting date: 2011-08-31), 10-K (reporting date: 2010-08-31), 10-K (reporting date: 2009-08-31), 10-K (reporting date: 2008-08-31), 10-K (reporting date: 2007-08-31), 10-K (reporting date: 2006-08-31), 10-K (reporting date: 2005-08-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Walgreens Boots Alliance Inc. Annual Report.
The analysis of the price to operating profit (P/OP) ratio from 2005 to 2019 reveals a cyclical pattern of valuation expansion and contraction, characterized by significant volatility in share price relative to a generally positive trajectory in operational earnings.
- Share Price Trends
- A significant fluctuation in share price is observed over the period. The price declined from 46.09 in 2005 to a low of 25.20 in 2008. This was followed by a strong recovery and growth phase, peaking at 84.95 in 2015, before entering a downward trend that resulted in a price of 55.80 by 2019.
- Operating Profit per Share Performance
- Operating profit per share exhibited a consistent long-term increase for the majority of the analyzed timeframe. Starting at 2.40 in 2005, the figure grew steadily to reach a peak of 6.76 in 2018. Although a decrease to 5.60 occurred in 2019, the overall trend indicates substantial growth in operational profitability per share over the 14-year span.
- P/OP Ratio Analysis
- The P/OP ratio moved through three distinct phases. An initial contraction occurred between 2005 and 2008, with the ratio falling from 19.24 to 7.25. This was followed by a period of valuation expansion from 2009 to 2015, where the ratio peaked at 19.81. The final phase, from 2016 to 2019, shows a steady compression of the multiple, ending at 9.96.
The data indicates a divergence between operational performance and market valuation in the latter part of the sequence. While operating profit per share remained significantly higher in 2019 than in 2005, the P/OP ratio ended the period at 9.96, nearly half of its 2005 level of 19.24, suggesting a reduction in the premium the market was willing to pay for each dollar of operating profit.
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Comparison to Competitors
Walgreens Boots Alliance Inc., P/OP, long-term trends, comparison to competitors
| Walgreens Boots Alliance Inc. | Costco Wholesale Corp. | Target Corp. | Walmart Inc. | |
|---|---|---|---|---|
| Oct 28, 2019 | 9.96 | 27.62 | 9.69 | 12.70 |
| Oct 11, 2018 | 10.49 | 21.34 | 8.83 | 12.85 |
| Oct 25, 2017 | 12.60 | 16.75 | 6.12 | 9.61 |
| Oct 20, 2016 | 14.63 | 17.91 | 8.88 | 8.97 |
| Oct 28, 2015 | 19.81 | 18.09 | 11.20 | 9.59 |
| Oct 20, 2014 | 13.64 | 16.90 | 8.89 | 9.15 |
| Oct 21, 2013 | 14.03 | 16.80 | 8.18 | 8.85 |
| Oct 19, 2012 | 9.75 | 14.86 | 7.38 | 7.83 |
| Oct 25, 2011 | 6.89 | 14.53 | 6.80 | 7.16 |
| Oct 26, 2010 | 9.18 | 13.16 | 8.40 | 8.78 |
| Oct 26, 2009 | 11.85 | 14.35 | 5.12 | 9.07 |
| Oct 30, 2008 | 7.25 | 12.67 | 7.80 | 9.47 |
| Oct 26, 2007 | 12.65 | 17.49 | 10.09 | 9.56 |
| Nov 7, 2006 | 16.20 | 15.05 | 10.40 | 10.81 |
| Nov 4, 2005 | 19.24 | 16.03 | 12.23 | 12.41 |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31), 10-K (reporting date: 2011-08-31), 10-K (reporting date: 2010-08-31), 10-K (reporting date: 2009-08-31), 10-K (reporting date: 2008-08-31), 10-K (reporting date: 2007-08-31), 10-K (reporting date: 2006-08-31), 10-K (reporting date: 2005-08-31).