Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Allergan Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
An analysis of the cash flow metrics from 2010 to 2014 reveals a consistent growth pattern in operational efficiency contrasted with significant volatility in the cash available to shareholders.
- Net Cash Provided by Operating Activities
- A sustained upward trend is observed in operating cash flows, which grew from 463,900 thousand US dollars in 2010 to 1,927,800 thousand US dollars in 2014. This represents a steady increase in the company's ability to generate cash from its core business operations over the five-year period, with the most significant growth occurring between 2010 and 2012.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE exhibited substantial fluctuations throughout the period. After starting at 955,800 thousand US dollars in 2010, a sharp decline was recorded in 2011, with values dropping to 174,800 thousand US dollars. This was followed by a rapid recovery and expansion, peaking at 2,112,400 thousand US dollars in 2013, before retreating to 1,666,900 thousand US dollars in 2014.
- Operational Cash Flow and FCFE Variance
- A notable divergence exists between the steady growth of operating cash flows and the volatile nature of FCFE. In 2011, FCFE was significantly lower than operating cash flow, suggesting a period of intensive capital expenditure or substantial debt repayment. Conversely, in 2013 and 2014, FCFE exceeded net cash provided by operating activities, indicating that net borrowing or the sale of assets contributed positively to the cash available to equity holders.
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Price to FCFE Ratio, Current
Allergan Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 300,237,694 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,666,900) |
| FCFE per share | 5.55 |
| Current share price (P) | 231.12 |
| Valuation Ratio | |
| P/FCFE | 41.63 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | 28.94 |
| Amgen Inc. | 100.20 |
| Bristol-Myers Squibb Co. | 16.39 |
| Danaher Corp. | 25.75 |
| Eli Lilly & Co. | 70.89 |
| Gilead Sciences Inc. | 25.72 |
| Johnson & Johnson | 22.05 |
| Merck & Co. Inc. | 14.74 |
| Pfizer Inc. | 18.87 |
| Regeneron Pharmaceuticals Inc. | 22.32 |
| Thermo Fisher Scientific Inc. | 21.93 |
| Vertex Pharmaceuticals Inc. | 41.42 |
Based on: 10-K (reporting date: 2014-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Allergan Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 300,237,694 | 298,467,649 | 298,083,478 | 304,442,771 | 305,677,123 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,666,900) | 2,112,400) | 1,405,300) | 174,800) | 955,800) | |
| FCFE per share3 | 5.55 | 7.08 | 4.71 | 0.57 | 3.13 | |
| Share price1, 4 | 231.12 | 125.54 | 107.05 | 88.82 | 72.90 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 41.63 | 17.74 | 22.71 | 154.69 | 23.31 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
1 Data adjusted for splits and stock dividends.
3 2014 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,666,900,000 ÷ 300,237,694 = 5.55
4 Closing price as at the filing date of Allergan Inc. Annual Report.
5 2014 Calculation
P/FCFE = Share price ÷ FCFE per share
= 231.12 ÷ 5.55 = 41.63
6 Click competitor name to see calculations.
The financial performance from 2010 to 2014 is characterized by a strong and consistent appreciation in market valuation contrasted with significant volatility in cash flow generation and valuation multiples.
- Share Price Appreciation
- A steady upward trajectory is observed in the share price, which grew from US$ 72.90 in 2010 to US$ 231.12 by 2014. This represents a substantial increase in market value, with the most aggressive growth occurring between 2013 and 2014, where the price increased by approximately 84%.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE per share exhibited high volatility during the period. A sharp contraction occurred in 2011, with values dropping to US$ 0.57. This was followed by a strong recovery period, peaking at US$ 7.08 in 2013, before declining again to US$ 5.55 in 2014. The inconsistency in FCFE suggests fluctuations in capital expenditures, working capital requirements, or net borrowing.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio shows extreme variance, reflecting a shifting relationship between market price and actual cash flow. The ratio peaked at 154.69 in 2011, a direct result of the collapse in FCFE per share coinciding with a rising share price. The most conservative valuation occurred in 2013, with a ratio of 17.74, coinciding with the period of highest FCFE generation. In 2014, the ratio expanded to 41.63, driven by the rapid escalation of the share price which outpaced the moderate decline in FCFE.
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