Price to FCFE (P/FCFE)
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Estée Lauder Cos. Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Free Cash Flow to Equity (FCFE)
Estée Lauder Cos. Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
- Net Cash Flows Provided by Operating Activities
-
The net cash flows generated from operating activities demonstrate variability over the observed period. Initially, there is a slight decline from 2,573 million USD in mid-2018 to 2,280 million USD by mid-2020. Following this, a significant increase is observed in mid-2021, reaching 3,631 million USD. However, after this peak, the operating cash flows decline to 3,040 million USD in mid-2022 and experience a sharper decrease to 1,731 million USD by mid-2023. This pattern indicates some volatility with an overall downward trajectory in the later years.
- Free Cash Flow to Equity (FCFE)
-
FCFE values fluctuate notably during the same timeframe. After a decrease from 1,934 million USD in 2018 to 1,603 million USD in 2019, there is a marked increase to 4,362 million USD in 2020, which stands out as an exceptional year. Subsequent periods see FCFE decreasing to 2,383 million USD in 2021 and continuing downward to 1,977 million USD in 2022, followed by a further reduction to 1,140 million USD in 2023. Although the FCFE shows a sharp peak in 2020, the general trend in the latter years is one of decline.
- Comparative Insights
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Both operating cash flows and FCFE exhibit peaks around 2020 and 2021, followed by consistent decreases thereafter. The sharp increase in FCFE in 2020 contrasts with the more moderate decline in operating cash flows during the same period, suggesting possible changes in financing activities or investment expenditures that impacted free cash available to equity holders. The downward trend post-2021 in both metrics may indicate challenges in sustaining high cash generation levels, potentially affecting liquidity and capacity for shareholder returns in the most recent years.
Price to FCFE Ratio, Current
Estée Lauder Cos. Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Procter & Gamble Co. | |
| P/FCFE, Industry | |
| Consumer Staples | |
Based on: 10-K (reporting date: 2023-06-30).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Estée Lauder Cos. Inc., historical P/FCFE calculation, comparison to benchmarks
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in millions)2 | |||||||
| FCFE per share3 | |||||||
| Share price1, 4 | |||||||
| Valuation Ratio | |||||||
| P/FCFE5 | |||||||
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Procter & Gamble Co. | |||||||
| P/FCFE, Industry | |||||||
| Consumer Staples | |||||||
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 Data adjusted for splits and stock dividends.
3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Estée Lauder Cos. Inc. Annual Report.
5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
The analysis of the financial data reveals several distinct trends concerning the share price, free cash flow to equity (FCFE) per share, and the price-to-FCFE ratio over a six-year period ending in June 2023.
- Share Price
- The share price demonstrated significant volatility during the period. Initially, it increased steadily from $135.59 in 2018 to a peak of $340.82 in 2021. Following this peak, the share price declined sharply, dropping to $265.43 in 2022 and further to $156.69 in 2023. This pattern suggests a period of strong market performance followed by a substantial correction or market reassessment in the last two years.
- FCFE per Share
- The FCFE per share shows considerable fluctuations. After a slight decline from $5.27 in 2018 to $4.44 in 2019, the metric surged sharply to $12.09 in 2020. Thereafter, it progressively decreased to $6.60 in 2021, $5.54 in 2022, and further to $3.19 in 2023. This trend indicates a temporary improvement in free cash flow generation in 2020, followed by a steady deterioration over the subsequent years.
- Price-to-FCFE (P/FCFE) Ratio
- The P/FCFE ratio exhibited notable variability. It began at 25.74 in 2018 and rose significantly to 44.37 in 2019, before decreasing to 18.44 in 2020. Subsequently, the ratio increased substantially again, reaching 51.67 in 2021, and remained elevated at 47.92 in 2022 and 49.16 in 2023. These elevated ratios in recent years reflect higher market valuations relative to free cash flow, which could imply investor optimism or expectations of future growth despite the declining FCFE per share.
In summary, the data presents a scenario where the company experienced a strong market valuation and share price growth up to 2021, which coincided with a spike in free cash flow per share in 2020. However, following 2021, both the share price and FCFE per share declined noticeably, while the P/FCFE ratio remained high, indicating a divergence between market price and underlying cash flow performance. This divergence may be reflective of market sentiment or forward-looking expectations that are not currently supported by the free cash flow trends.