Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Delta Air Lines Inc., FCFE calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2017-12-31).
The financial performance from 2017 to 2021 is characterized by a period of steady growth followed by extreme volatility and a subsequent recovery phase. A significant divergence between operating cash flows and free cash flow to equity is observed during the 2020 fiscal year, indicating a shift in liquidity management strategies.
- Net Cash Provided by Operating Activities
- A consistent upward trend is observed from 2017 to 2019, with values increasing from 5,148 million US$ to 8,425 million US$. This growth was abruptly reversed in 2020, where operating cash flow turned negative, reaching -3,793 million US$. A recovery occurred in 2021, returning to a positive position of 3,264 million US$, although this remains significantly lower than the pre-2020 peak.
- Free Cash Flow to Equity (FCFE)
- FCFE grew modestly between 2017 and 2018 before increasing to 3,976 million US$ in 2019. In 2020, FCFE spiked to 11,800 million US$, representing a stark contrast to the negative operating cash flow of the same period. This suggests a substantial influx of cash from financing activities, such as new debt issuance or asset divestitures. By 2021, FCFE shifted to a negative 3,915 million US$, indicating heavy capital expenditures or debt repayments during the recovery period.
- Cash Flow Correlation and Liquidity Analysis
- The relationship between operating cash flows and FCFE indicates a strategic shift in 2020. While the core operations failed to generate cash, the surge in FCFE demonstrates an aggressive pursuit of external funding to maintain solvency. The subsequent negative FCFE in 2021, despite positive operating cash flows, reflects a period of reinvestment or deleveraging as operations stabilized.
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Price to FCFE Ratio, Current
Delta Air Lines Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 641,197,918 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | (3,915) |
| FCFE per share | -6.11 |
| Current share price (P) | 29.70 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| FedEx Corp. | 7.43 |
| Uber Technologies Inc. | 13.40 |
| Union Pacific Corp. | 26.81 |
| United Airlines Holdings Inc. | — |
| United Parcel Service Inc. | 11.67 |
| P/FCFE, Sector | |
| Transportation | 19.10 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Delta Air Lines Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 639,929,760 | 638,146,665 | 640,093,995 | 678,950,098 | 706,913,358 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | (3,915) | 11,800) | 3,976) | 2,539) | 2,453) | |
| FCFE per share3 | -6.12 | 18.49 | 6.21 | 3.74 | 3.47 | |
| Share price1, 4 | 42.33 | 43.29 | 59.13 | 51.08 | 53.46 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | 2.34 | 9.52 | 13.66 | 15.41 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| FedEx Corp. | 36.75 | — | — | — | — | |
| Uber Technologies Inc. | 139.66 | — | — | — | — | |
| Union Pacific Corp. | 17.16 | — | — | — | — | |
| United Airlines Holdings Inc. | 2.58 | — | — | — | — | |
| United Parcel Service Inc. | 22.62 | — | — | — | — | |
| P/FCFE, Sector | ||||||
| Transportation | 19.46 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Industrials | — | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -3,915,000,000 ÷ 639,929,760 = -6.12
4 Closing price as at the filing date of Delta Air Lines Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 42.33 ÷ -6.12 = —
6 Click competitor name to see calculations.
Between 2017 and 2020, a consistent contraction is observed in the Price to Free Cash Flow to Equity (P/FCFE) ratio, which declined from 15.41 to 2.34. This trend indicates a significant divergence between the market valuation of the shares and the generated free cash flow available to equity holders during this period.
- Share Price Dynamics
- The share price experienced fluctuations between 2017 and 2019, reaching a peak of 59.13 USD in 2019. A sharp decline followed in 2020, with the price dropping to 43.29 USD and remaining relatively stagnant at 42.33 USD by the end of 2021.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share exhibited a growth trend from 2017 to 2019, increasing from 3.47 USD to 6.21 USD. An anomalous spike occurred in 2020, with FCFE per share reaching 18.49 USD. This trajectory reversed sharply in 2021, resulting in a negative value of -6.12 USD per share.
- P/FCFE Ratio Correlation
- The P/FCFE ratio decreased steadily from 15.41 in 2017 to 9.52 in 2019 as FCFE growth outpaced share price movements. The collapse of the ratio to 2.34 in 2020 suggests that the market did not price in the sudden surge in FCFE, treating it as a non-recurring event. For 2021, the ratio is unavailable as the negative FCFE per share renders the metric mathematically inapplicable for valuation purposes.
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