Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Boston Scientific Corp., FCFE calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
Analysis of the financial performance from 2018 through 2022 reveals a marked discrepancy between the relative stability of operating cash flows and the high volatility of free cash flow to equity (FCFE).
- Operating Cash Flow Trends
- A substantial increase in cash provided by operating activities occurred between 2018 and 2019, rising from 310 million to 1,836 million. Following this initial surge, operating cash flows remained relatively stable, fluctuating within a range of 1,508 million to 1,870 million between 2019 and 2022. This suggests a consistent ability to generate liquidity from core business operations after the 2019 expansion.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE exhibited significant instability over the five-year period. A peak of 4,176 million was recorded in 2019, which was followed by a sharp contraction to 145 million in 2020. While a recovery was observed in 2021 with FCFE rising to 1,330 million, the figure declined again to 785 million by the end of 2022.
- Analysis of FCFE and Operating Cash Flow Divergence
- The divergence between operating cash flow and FCFE indicates active balance sheet management or varying capital intensity. In 2018 and 2019, FCFE exceeded operating cash flows, a pattern typically associated with net debt issuance or the sale of assets. From 2020 to 2022, the trend reversed, with FCFE remaining consistently below operating cash flows, suggesting an increase in capital expenditures or the repayment of debt during this period.
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Price to FCFE Ratio, Current
Boston Scientific Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 1,437,698,101 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 785) |
| FCFE per share | 0.55 |
| Current share price (P) | 51.94 |
| Valuation Ratio | |
| P/FCFE | 95.13 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | 32.90 |
| Elevance Health Inc. | 24.18 |
| Intuitive Surgical Inc. | 63.02 |
| Medtronic PLC | 30.62 |
| UnitedHealth Group Inc. | 21.02 |
| P/FCFE, Sector | |
| Health Care Equipment & Services | 15.88 |
| P/FCFE, Industry | |
| Health Care | 27.92 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Boston Scientific Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,434,780,104 | 1,426,724,712 | 1,417,165,707 | 1,396,195,349 | 1,385,961,926 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 785) | 1,330) | 145) | 4,176) | 1,413) | |
| FCFE per share3 | 0.55 | 0.93 | 0.10 | 2.99 | 1.02 | |
| Share price1, 4 | 47.18 | 43.71 | 38.75 | 39.91 | 39.86 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 86.23 | 46.89 | 378.73 | 13.34 | 39.10 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | 26.11 | 24.52 | — | — | — | |
| Elevance Health Inc. | 14.26 | 11.07 | — | — | — | |
| Intuitive Surgical Inc. | 89.67 | 58.39 | — | — | — | |
| Medtronic PLC | 19.71 | 38.91 | — | — | — | |
| UnitedHealth Group Inc. | 12.57 | 20.11 | — | — | — | |
| P/FCFE, Sector | ||||||
| Health Care Equipment & Services | 16.47 | 22.14 | — | — | — | |
| P/FCFE, Industry | ||||||
| Health Care | 18.50 | 17.94 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 785,000,000 ÷ 1,434,780,104 = 0.55
4 Closing price as at the filing date of Boston Scientific Corp. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 47.18 ÷ 0.55 = 86.23
6 Click competitor name to see calculations.
The analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio from 2018 to 2022 reveals significant volatility, primarily driven by instability in the underlying FCFE per share rather than fluctuations in the share price. While the share price exhibited a gradual upward trajectory, the FCFE per share experienced sharp contractions and intermittent recoveries, resulting in erratic valuation multiples.
- Share Price Performance
- The share price remained relatively stable between 2018 and 2020, hovering around the $39.00 range. A growth trend emerged in 2021 and 2022, with the price increasing to $43.71 and $47.18, respectively, representing a steady appreciation in market valuation.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE per share demonstrated extreme inconsistency over the five-year period. A peak of $2.99 in 2019 was followed by a severe decline to $0.10 in 2020. While a recovery occurred in 2021 with an increase to $0.93, the value subsequently decreased to $0.55 by the end of 2022, indicating a volatile cash flow profile.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio reflects a strong inverse correlation with FCFE per share. The ratio reached its lowest point of 13.34 in 2019, coinciding with the peak in cash flow. In 2020, the ratio spiked to an anomalous 378.73, a direct result of the sharp decline in FCFE per share. Despite the share price increase, the ratio remained high in 2022 at 86.23, suggesting that the market price is significantly elevated relative to the current free cash flow available to equity holders.
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