Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Walgreens Boots Alliance Inc., current price multiples
| Walgreens Boots Alliance Inc. | Costco Wholesale Corp. | Target Corp. | Walmart Inc. | ||
|---|---|---|---|---|---|
| Selected Financial Data | |||||
| Current share price (P) | $39.01 | ||||
| No. shares of common stock outstanding | 866,534,089 | ||||
| Growth rate (g) | 9.31% | ||||
| Earnings per share (EPS) | $4.60 | ||||
| Next year expected EPS | $5.02 | ||||
| Operating profit per share | $5.77 | ||||
| Sales per share | $157.95 | ||||
| Book value per share (BVPS) | $27.13 | ||||
| Valuation Ratios (Price Multiples) | |||||
| Price to earnings (P/E) | 8.49 | 59.30 | 11.02 | 39.94 | |
| Price to next year expected earnings | 7.77 | 53.39 | 9.47 | 36.19 | |
| Price-earnings-growth (PEG) | 0.91 | 5.36 | 0.67 | 3.86 | |
| Price to operating profit (P/OP) | 6.76 | 47.05 | 8.10 | 26.45 | |
| Price to sales (P/S) | 0.25 | 1.75 | 0.42 | 1.15 | |
| Price to book value (P/BV) | 1.44 | 18.49 | 3.07 | 8.53 | |
Based on: 10-K (reporting date: 2019-08-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Walgreens Boots Alliance Inc., historical price multiples
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
- Price to Earnings (P/E) Ratio
- The Price to Earnings ratio demonstrates a consistent downward trend from 29.61 in 2014 to 12.51 in 2019. This decline indicates a significant decrease in the market valuation relative to earnings, suggesting the stock became more attractively valued or that earnings improved relative to price over this period.
- Price to Operating Profit (P/OP) Ratio
- The Price to Operating Profit ratio exhibits more variability but generally declines from 13.64 in 2014 to 9.96 in 2019. There is a notable peak in 2015 at 19.81, after which the ratio steadily decreases. The overall decrease implies a growing operating profitability or a comparatively lower market price per unit of operating profit by the end of the period.
- Price to Sales (P/S) Ratio
- The Price to Sales ratio shows a clear and continuous decline over the six-year span, falling from 0.75 in 2014 to 0.36 in 2019. This indicates that investor willingness to pay for each dollar of sales has diminished, which may suggest either sales growth outpacing market price increases or a softening of market valuation metrics against sales figures.
- Price to Book Value (P/BV) Ratio
- The Price to Book Value ratio remains relatively stable but slightly decreasing from 2.8 in 2014 to 2.12 in 2019, exhibiting minor fluctuations in between. This suggests a moderate reduction in the market's valuation of the company relative to its net asset value over the analyzed period.
Price to Earnings (P/E)
Walgreens Boots Alliance Inc., historical P/E calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 892,541,146 | 949,164,514 | 1,009,549,218 | 1,083,282,661 | 1,088,793,571 | 950,386,889 | |
| Selected Financial Data (US$) | |||||||
| Net earnings attributable to Walgreens Boots Alliance, Inc. (in millions) | 3,982) | 5,024) | 4,078) | 4,173) | 4,220) | 1,932) | |
| Earnings per share (EPS)2 | 4.46 | 5.29 | 4.04 | 3.85 | 3.88 | 2.03 | |
| Share price1, 3 | 55.80 | 70.90 | 69.36 | 81.02 | 84.95 | 60.20 | |
| Valuation Ratio | |||||||
| P/E ratio4 | 12.51 | 13.39 | 17.17 | 21.03 | 21.92 | 29.61 | |
| Benchmarks | |||||||
| P/E Ratio, Competitors5 | |||||||
| Costco Wholesale Corp. | 35.76 | — | — | — | — | — | |
| Target Corp. | — | — | — | — | — | — | |
| Walmart Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
EPS = Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ No. shares of common stock outstanding
= 3,982,000,000 ÷ 892,541,146 = 4.46
3 Closing price as at the filing date of Walgreens Boots Alliance Inc. Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= 55.80 ÷ 4.46 = 12.51
5 Click competitor name to see calculations.
The financial data presents a clear overview of the share price, earnings per share (EPS), and price-to-earnings (P/E) ratio across a six-year period ending in 2019. The analysis highlights several discernible trends and shifts in valuation and earnings performance.
- Share Price
- The share price exhibited an initial upward trend from $60.20 in 2014 to a peak of $84.95 in 2015. Following this peak, the share price demonstrated a consistent downward movement over the subsequent years, declining to $55.80 by 2019. This represents a significant decrease, especially notable after the 2015 high, indicating potential market reevaluation or broader industry challenges influencing the stock value.
- Earnings per Share (EPS)
- EPS shows a generally positive trajectory from 2014 to 2018. The figure more than doubled from $2.03 in 2014 to $5.29 in 2018, suggesting enhanced profitability or improved earnings performance during that period. However, in 2019, EPS experienced a decline to $4.46, indicating a slowdown or reduction in earnings despite the overall growth trend observed in prior years.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio demonstrated a steady decrease from 29.61 in 2014 down to 12.51 in 2019. This decline occurred in conjunction with rising EPS and falling share price, reflecting a market reassessment of valuation multiples. The lower P/E ratio may signify more conservative investor expectations or adjustments in perceived growth prospects and risk associated with the company.
Overall, the data reveals a period of strong earnings growth up to 2018, contrasted by a declining share price and contracting valuation metrics over the same period. The drop in EPS and share price in 2019 suggest emerging challenges or market conditions affecting performance and investor confidence. The decreasing P/E ratio underscores a substantial shift in investor expectations towards a more cautious outlook on future earnings potential.
Price to Operating Profit (P/OP)
Walgreens Boots Alliance Inc., historical P/OP calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 892,541,146 | 949,164,514 | 1,009,549,218 | 1,083,282,661 | 1,088,793,571 | 950,386,889 | |
| Selected Financial Data (US$) | |||||||
| Operating income (in millions) | 4,998) | 6,414) | 5,557) | 6,001) | 4,668) | 4,194) | |
| Operating profit per share2 | 5.60 | 6.76 | 5.50 | 5.54 | 4.29 | 4.41 | |
| Share price1, 3 | 55.80 | 70.90 | 69.36 | 81.02 | 84.95 | 60.20 | |
| Valuation Ratio | |||||||
| P/OP ratio4 | 9.96 | 10.49 | 12.60 | 14.63 | 19.81 | 13.64 | |
| Benchmarks | |||||||
| P/OP Ratio, Competitors5 | |||||||
| Costco Wholesale Corp. | 27.62 | — | — | — | — | — | |
| Target Corp. | — | — | — | — | — | — | |
| Walmart Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 4,998,000,000 ÷ 892,541,146 = 5.60
3 Closing price as at the filing date of Walgreens Boots Alliance Inc. Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 55.80 ÷ 5.60 = 9.96
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited initial growth from US$60.2 in 2014 to a peak of US$84.95 in 2015. After this peak, a gradual decline is observed over the subsequent years, dropping to US$55.8 by 2019. This indicates volatility and a downward adjustment in market valuation after 2015.
- Operating Profit Per Share Trend
- Operating profit per share demonstrated a relatively stable and increasing trend from 2014 (US$4.41) to 2018 (US$6.76), with a slight dip in 2015 before rising steadily. However, in 2019, the figure decreased to US$5.6, suggesting a potential reduction in operational profitability on a per-share basis after several years of growth.
- Price to Operating Profit (P/OP) Ratio Trend
- The P/OP ratio rose sharply from 13.64 in 2014 to 19.81 in 2015, reflecting an elevated market price relative to operating profit. Subsequently, this ratio declined steadily each year, reaching 9.96 in 2019. This decreasing trend points to the market’s recalibration, possibly reflecting diminished investor confidence or an adjustment of the stock price relative to its earnings power.
- Overall Insights
- The relationship between share price and operating profit per share suggests that although operational performance improved through 2018, the market valuation peaked earlier and then softened. The decline in the P/OP ratio indicates that the share price has decreased at a faster pace than operating profit, suggesting that investors may have reassessed the company’s growth prospects or risk profile negatively during this period.
Price to Sales (P/S)
Walgreens Boots Alliance Inc., historical P/S calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 892,541,146 | 949,164,514 | 1,009,549,218 | 1,083,282,661 | 1,088,793,571 | 950,386,889 | |
| Selected Financial Data (US$) | |||||||
| Sales (in millions) | 136,866) | 131,537) | 118,214) | 117,351) | 103,444) | 76,392) | |
| Sales per share2 | 153.34 | 138.58 | 117.10 | 108.33 | 95.01 | 80.38 | |
| Share price1, 3 | 55.80 | 70.90 | 69.36 | 81.02 | 84.95 | 60.20 | |
| Valuation Ratio | |||||||
| P/S ratio4 | 0.36 | 0.51 | 0.59 | 0.75 | 0.89 | 0.75 | |
| Benchmarks | |||||||
| P/S Ratio, Competitors5 | |||||||
| Costco Wholesale Corp. | 0.88 | — | — | — | — | — | |
| Target Corp. | — | — | — | — | — | — | |
| Walmart Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Sales per share = Sales ÷ No. shares of common stock outstanding
= 136,866,000,000 ÷ 892,541,146 = 153.34
3 Closing price as at the filing date of Walgreens Boots Alliance Inc. Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= 55.80 ÷ 153.34 = 0.36
5 Click competitor name to see calculations.
The financial data indicates several noteworthy trends over the observed period from 2014 to 2019. Firstly, the share price exhibits a peak in 2015 at $84.95, followed by a general decline to $55.8 in 2019, showing a downward trend in market valuation after 2015.
Meanwhile, sales per share demonstrate a consistent upward trajectory throughout the entire period, increasing steadily from $80.38 in 2014 to $153.34 in 2019. This suggests an improvement in the company's revenue generation on a per-share basis, reflecting positive sales growth year over year.
Contrasting with the sales improvement, the price-to-sales (P/S) ratio declines consistently from 0.75 in 2014 to 0.36 in 2019. The decreasing P/S ratio implies that the share price is growing at a slower rate than sales or that the market valuation relative to sales is compressing. This could be indicative of market skepticism regarding future growth prospects or profitability despite rising sales.
- Summary of trends:
- Share price peaked in 2015 and declined thereafter.
- Sales per share increased steadily and significantly over the period.
- P/S ratio declined steadily, suggesting a disconnect between sales growth and market valuation.
Overall, while the company demonstrated substantial sales growth on a per-share basis, the decreasing share price and P/S ratio over time may point to investor concerns or other external factors influencing market perception despite operational sales improvements.
Price to Book Value (P/BV)
Walgreens Boots Alliance Inc., historical P/BV calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 892,541,146 | 949,164,514 | 1,009,549,218 | 1,083,282,661 | 1,088,793,571 | 950,386,889 | |
| Selected Financial Data (US$) | |||||||
| Total Walgreens Boots Alliance, Inc. shareholders’ equity (in millions) | 23,512) | 26,007) | 27,466) | 29,880) | 30,861) | 20,457) | |
| Book value per share (BVPS)2 | 26.34 | 27.40 | 27.21 | 27.58 | 28.34 | 21.52 | |
| Share price1, 3 | 55.80 | 70.90 | 69.36 | 81.02 | 84.95 | 60.20 | |
| Valuation Ratio | |||||||
| P/BV ratio4 | 2.12 | 2.59 | 2.55 | 2.94 | 3.00 | 2.80 | |
| Benchmarks | |||||||
| P/BV Ratio, Competitors5 | |||||||
| Costco Wholesale Corp. | 8.58 | — | — | — | — | — | |
| Target Corp. | — | — | — | — | — | — | |
| Walmart Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
BVPS = Total Walgreens Boots Alliance, Inc. shareholders’ equity ÷ No. shares of common stock outstanding
= 23,512,000,000 ÷ 892,541,146 = 26.34
3 Closing price as at the filing date of Walgreens Boots Alliance Inc. Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= 55.80 ÷ 26.34 = 2.12
5 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends over the six-year period ending in 2019. The share price exhibited a fluctuating pattern, initially rising sharply from $60.20 in 2014 to a peak of $84.95 in 2015, followed by a gradual decline to $55.80 by 2019. This represents an overall decrease of approximately 34% from its 2015 high, suggesting market challenges or changes in investor sentiment over time.
Book value per share (BVPS) showed relatively stable behavior throughout the period. Starting at $21.52 in 2014, BVPS increased to $28.34 in 2015, then slightly declined and plateaued around the $27 mark in subsequent years, ending at $26.34 in 2019. This trend indicates that the underlying net asset value per share remained fairly consistent, with only minor fluctuations, suggesting stability in the company's equity base.
The price-to-book value (P/BV) ratio correspondingly trended downward after an initial rise. It began at 2.8 in 2014, peaked modestly at 3.0 in 2015, and then declined steadily to 2.12 by 2019. This decline implies that the market valuation relative to the company's book value diminished over this timeframe, reflecting either reduced market confidence, increased perceived risk, or shifts in valuation benchmarks.
- Share price trend
- Rising sharply in 2015 followed by a steady decline, ending lower than the initial 2014 value.
- Book value per share behavior
- Overall stability with slight fluctuations, indicating consistent net asset valuation per share.
- Price-to-book value ratio dynamics
- Initial increase then continuous decline, suggesting a decreasing market premium over book value.
In summary, while the company's book value per share remained comparatively steady, market valuation as reflected by share price and the P/BV ratio experienced volatility and a downward trend, potentially signaling changing investor perceptions or external factors affecting market performance during the period under review.