Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Johnson Controls International plc, FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
The financial data reveals a stark divergence between operating cash flows and free cash flow to equity (FCFE) from 2018 to 2023. While operating cash flows remained consistently positive throughout the period, FCFE exhibited extreme volatility, transitioning from deep deficits to significant surpluses before moderating in the final year.
- Operating Cash Flow Trends
- Cash provided by operating activities from continuing operations demonstrated relative stability, fluctuating within a range of 1,743 million US$ to 2,551 million US$. A notable dip occurred in 2019, followed by a recovery period peaking in 2021. The 2023 figure of 2,221 million US$ indicates a sustained ability to generate cash from core operations.
- FCFE Volatility and Reversal
- FCFE showed significant variance, beginning with negative values of -955 million US$ in 2018 and -2,445 million US$ in 2019. A sharp reversal occurred in 2020, with FCFE shifting to a positive 2,548 million US$. This upward trajectory peaked in 2022 at 3,491 million US$ before contracting to 1,281 million US$ in 2023.
- Correlation Analysis between CFO and FCFE
- An analysis of the relationship between operating cash flows and FCFE suggests significant impacts from capital expenditures and financing activities. In 2018 and 2019, FCFE was negative despite positive operating cash, implying high capital investment or net debt repayments. Conversely, in 2020 and 2022, FCFE exceeded the cash provided by operating activities, a pattern typically associated with substantial net borrowing or a strategic reduction in capital spending, which increased the cash available to equity holders.
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Price to FCFE Ratio, Current
Johnson Controls International plc, current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 673,675,568 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 1,281) |
| FCFE per share | 1.90 |
| Current share price (P) | 60.47 |
| Valuation Ratio | |
| P/FCFE | 31.80 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 20.71 |
| Eaton Corp. plc | 31.96 |
| GE Aerospace | 42.84 |
| Honeywell International Inc. | 8.86 |
| Lockheed Martin Corp. | 16.13 |
| RTX Corp. | 57.40 |
| P/FCFE, Sector | |
| Capital Goods | 29.00 |
| P/FCFE, Industry | |
| Industrials | 30.31 |
Based on: 10-K (reporting date: 2023-09-30).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Johnson Controls International plc, historical P/FCFE calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 680,673,839 | 686,703,889 | 704,332,395 | 723,907,803 | 771,419,761 | 924,058,960 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in millions)2 | 1,281) | 3,491) | 2,095) | 2,548) | (2,445) | (955) | |
| FCFE per share3 | 1.88 | 5.08 | 2.97 | 3.52 | -3.17 | -1.03 | |
| Share price1, 4 | 54.10 | 66.40 | 78.33 | 45.36 | 42.23 | 33.34 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 28.75 | 13.06 | 26.33 | 12.89 | — | — | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Boeing Co. | — | 120.43 | — | — | — | — | |
| Caterpillar Inc. | 14.39 | 24.03 | 16.36 | — | — | — | |
| Eaton Corp. plc | 33.65 | 28.68 | 24.43 | — | — | — | |
| GE Aerospace | 225.15 | 44.45 | — | — | — | — | |
| Honeywell International Inc. | 26.10 | 27.59 | 46.23 | — | — | — | |
| Lockheed Martin Corp. | 13.13 | 11.63 | 14.65 | — | — | — | |
| RTX Corp. | 7.05 | 26.71 | 35.07 | — | — | — | |
| P/FCFE, Sector | |||||||
| Capital Goods | 20.26 | 25.94 | — | — | — | — | |
| P/FCFE, Industry | |||||||
| Industrials | 23.85 | 25.07 | — | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 Data adjusted for splits and stock dividends.
3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,281,000,000 ÷ 680,673,839 = 1.88
4 Closing price as at the filing date of Johnson Controls International plc Annual Report.
5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 54.10 ÷ 1.88 = 28.75
6 Click competitor name to see calculations.
A significant transition in cash flow generation is observed between 2018 and 2023, moving from negative Free Cash Flow to Equity (FCFE) per share to a positive, albeit volatile, trajectory. This shift enabled the calculation of the Price to FCFE (P/FCFE) ratio starting in 2020, revealing a pattern of substantial valuation fluctuations.
- Share Price Trends
- The share price exhibited a general upward trajectory from 2018 to 2021, rising from 33.34 US$ to a peak of 78.33 US$. Following this peak, a corrective trend emerged, with the price declining to 66.40 US$ in 2022 and further to 54.10 US$ by September 30, 2023.
- FCFE per Share Performance
- Negative FCFE per share was recorded in 2018 (-1.03 US$) and 2019 (-3.17 US$), indicating a period of cash outflow. A pivot to positive cash flow occurred in 2020 (3.52 US$), with a peak reached in 2022 at 5.08 US$. However, a sharp contraction was observed in 2023, where FCFE per share fell to 1.88 US$, the lowest positive value in the measured period.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio demonstrates high volatility, characterized by two distinct peaks. The first peak occurred in 2021 at 26.33, driven by the surge in share price despite a slight decline in FCFE. A significant compression occurred in 2022, where the ratio dropped to 13.06 as share prices declined while FCFE per share reached its maximum. By 2023, the ratio reached its highest point at 28.75; this increase was not driven by price appreciation, but rather by a substantial decrease in FCFE per share, suggesting a valuation expansion relative to the diminished cash flow.
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