Boeing Co. (BA)

Price to FCFE (P/FCFE)

Difficulty: Intermediate

Boeing Co., FCFE calculation

USD $ in millions

12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Net earnings related to parent	8,197	4,895	5,176	5,446	4,585
Net (earnings) losses related to noncontrolling interests	(2)	(1)	(3)	10	9
Net noncash charges	2,654	2,560	2,395	2,505	2,507
Changes in assets and liabilities	2,495	3,045	1,795	897	1,078
Net cash provided by operating activities	13,344	10,499	9,363	8,858	8,179
Property, plant and equipment additions	(1,739)	(2,613)	(2,450)	(2,236)	(2,098)
Property, plant and equipment reductions	92	38	42	34	51
Purchase of distribution rights	(131)	–	–	–	(140)
New borrowings	2,077	1,325	1,746	962	571
Debt repayments	(953)	(1,359)	(885)	(1,601)	(1,434)
Repayments of distribution rights and other asset financing	–	(24)	–	(185)	(280)
Free cash flow to equity (FCFE)	12,690	7,866	7,816	5,832	4,849

Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to Boeing Co.'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.	Boeing Co.'s FCFE increased from 2015 to 2016 and from 2016 to 2017.

Boeing Co., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	582,580,973
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)	12,690
FCFE per share	21.78
Current share price (P)	360.09
Ratio
P/FCFE	16.53
Benchmarks
P/FCFE, Competitors
General Dynamics Corp.	17.48
Lockheed Martin Corp.	17.29
Northrop Grumman Corp.	5.84
Raytheon Co.	32.75
United Technologies Corp.	15.18
P/FCFE, Sector
Aerospace & Defense	14.59
P/FCFE, Industry
Industrials	16.63

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.

Boeing Co., 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	588,490,313	612,478,643	662,503,822	704,387,613	743,404,506
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)²	12,690	7,866	7,816	5,832	4,849
FCFE per share⁴	21.56	12.84	11.80	8.28	6.52
Share price^1, 3	343.80	163.81	116.36	148.09	130.16
Ratio
P/FCFE⁵	15.94	12.75	9.86	17.89	19.95
Benchmarks
P/FCFE, Competitors
General Dynamics Corp.	17.60	24.11	28.78	14.16	13.38
Lockheed Martin Corp.	18.40	23.62	4.99	20.16	14.71
Northrop Grumman Corp.	5.94	16.31	14.90	15.54	6.01
Raytheon Co.	33.10	19.68	19.43	14.41	14.43
United Technologies Corp.	14.93	10.56	12.16	21.48	34.14
P/FCFE, Sector
Aerospace & Defense	14.56	15.27	10.05	17.91	16.83
P/FCFE, Industry
Industrials	16.22	13.01	11.73	16.91	19.30

¹ Data adjusted for splits and stock dividends.

³ Close price on the filing date of Boeing Co.'s Annual Report.

2017 Calculations

⁴ FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 12,690,000,000 ÷ 588,490,313 = 21.56

⁵ P/FCFE = Share price ÷ FCFE per share
= 343.80 ÷ 21.56 = 15.94

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